NEW YORK (TheStreet) -- Despite Wall Street's quarter-to-quarter obsession with growth, it is easy to understand why Oracle's (ORCL) shares were punished on CEO and earnings news. So with shares down almost 10% over the past three months, now's the best time to buy. There are plenty of reasons to remain positive about Oracle's prospects.
While talking heads point to Oracle's weak top line, the company is unmatched when it comes to its capabilities in database and analytics, middleware, hardware and applications.
Despite its recent downbeat results, including 2.7% revenue growth that missed estimates of $8.78 billion, the company continues to deliver across cloud business lines. Cloud Software-as-a-Service (SaaS) surged 33%. Likewise, cloud infrastructure revenue was up more than 26%.
What's more, the shares still have a high analyst target of $49, a 23% upside from current levels. When compared with nimbler rivals such as Salesforce.com (CRM) and Workday (WDAY) , Oracle's revenue growth may seem unimpressive. But growth will return on improved cloud initiatives.
Oracle is on its way to becoming an SaaS consolidator as well as a one-stop enterprise service provider. Just look at the company's software and cloud-based services, including recent deals for Responsys (MKTG) and cloud marketing technology specialist BlueKai.
Despite the weak fiscal second-quarter forecast, Oracle just delivered a 20-basis point jump in operating margin. That was achieved despite the 7% jump in research-and-development costs. There was also a 10% decline in hardware product and services support -- a business Oracle is working to shed -- as the company focuses on cost management. This means, even during periods of weak revenue growth, Oracle is working to increase its bottom line. And the company can still keep up by not having to sacrifice innovation and R&D spending.