Oracle Corporation Stock Buy Recommendation Reiterated (ORCL)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Oracle Corporation (Nasdaq: ORCL) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:
  • ORCL's revenue growth has slightly outpaced the industry average of 1.8%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 29.44% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ORCL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ORACLE CORP has improved earnings per share by 23.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ORACLE CORP increased its bottom line by earning $1.97 versus $1.67 in the prior year. This year, the market expects an improvement in earnings ($2.70 versus $1.97).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 17.7% when compared to the same quarter one year prior, going from $2,192.00 million to $2,581.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Software industry and the overall market, ORACLE CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

Oracle Corporation develops, manufactures, markets, hosts, and supports database and middleware software, applications software, and hardware systems. Oracle has a market cap of $165.27 billion and is part of the technology sector and computer software & services industry. The company has a P/E ratio of 16.5, below the S&P 500 P/E ratio of 17.7. Shares are up 4.8% year to date as of the close of trading on Friday.

You can view the full Oracle Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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