NEW YORK (TheStreet) -- Shares of Oracle Corp (ORCL) - Get Reportwere slightly lower by 0.13% to $39.74 in mid-morning trading Thursday, after analysts at Jefferies issued an upbeat note on the software maker this morning.
The firm upgraded the company to "buy" from "hold" with a higher price target of $50 from its prior $41.
Analysts at Jefferies cited Oracle's "imminent product cycle" and its continued relevance in the shift to Cloud.
The firm added that it expects decent growth in the longer term.
"We're adjusting capex and CF estimates due to a more aggressive move to Cloud, but we believe ORCL will remain a very relevant IT vendor with decent growth prospects longer term, and that's all that's needed to get to $50," Jefferies wrote in a note this morning.
Redwood City, Calif.-based Oracle is a provider of enterprise software and computer hardware products and services.
The company operates through various segments, including new software licenses and cloud software subscriptions, cloud infrastructure-as-a-service, software license updates and product support, hardware systems products, hardware systems support, and services business.
Separately, TheStreet Ratings team rates ORACLE CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate ORACLE CORP (ORCL) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for ORACLE CORP is currently very high, coming in at 82.79%. Regardless of ORCL's high profit margin, it has managed to decrease from the same period last year.
- ORCL's debt-to-equity ratio of 0.86 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.98 is very high and demonstrates very strong liquidity.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.5%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- ORACLE CORP's earnings per share declined by 22.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, ORACLE CORP reported lower earnings of $2.22 versus $2.39 in the prior year. This year, the market expects an improvement in earnings ($2.70 versus $2.22).
- You can view the full analysis from the report here: ORCL Ratings Report