Will Oracle (ORCL) Stock be Helped Today by Datalogix Acquisition?

NEW YORK (TheStreet) -- Oracle (ORCL) shares are down 0.1% to $45.96 on heavy trading Monday after the enterprise software and computer hardware products manufacturer and service provider announced that it purchased data tracking firm Datalogix for an undisclosed amount.

Datalogix' clients currently include names like Ford (F) , Kraft (KRFT) , Facebook (FB) and Twitter (TWTR) , and the company will continue to operate independently until it is added to the Oracle Data Cloud.

"The addition of Datalogix to the Oracle Data Cloud will provide data-driven marketers the most valuable targeting and measurement solution available," the company said in a statement.

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The company's stock experienced a bump in trading last week following the release of its second quarter earnings results last Wednesday. The company reported earnings of 69 cents per diluted share on revenue of $9.6 billion.

Wall Street was expecting the company to earn 68 cents per diluted share on revenue of $9.5 billion during the quarter. 

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 solid stock price performance, revenue growth, reasonable valuation levels, 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:

  • Compared to its closing price of one year ago, ORCL's share price has jumped by 31.06%, exceeding the performance of the broader market during that same time frame. 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.
  • ORCL's revenue growth trails the industry average of 26.3%. 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 ($2.96 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.
  • You can view the full analysis from the report here: ORCL Ratings Report
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