NEW YORK (TheStreet) -- Shares of computer technology company Oracle Corp. (ORCL) continued to rise, up more than 1.5% on Friday to a 52-week high of $46.08, after the company reported better-than-expected second-quarter earnings earlier this week.
The company reported adjusted earnings of 69 cents a share on revenue of $9.6 billion. Analysts had expected adjusted earnings of 68 cents a share on revenue of $9.5 billion, according to Bloomberg.
Oracle expects profit in the range of 65 cents to 70 cents for the third quarter and anticipates revenue would be flat to 4% higher year-over-year. Analysts expect profit of 73 cents and a revenue increase of 4% to $9.68 billion.
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Separately, TheStreet Ratings team rates ORACLE CORP as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate ORACLE CORP (ORCL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ORCL's revenue growth trails the industry average of 26.6%. Since the same quarter one year prior, revenues slightly increased by 3.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- ORACLE CORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ORACLE CORP increased its bottom line by earning $2.39 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($3.04 versus $2.39).
- ORCL's debt-to-equity ratio of 0.68 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 4.09 is very high and demonstrates very strong liquidity.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: ORCL Ratings Report