After setting new 52-week lows four days in a row,

Oracle

(ORCL) - Get Report

shares finally may be approaching the bottom, some analysts say.

"Personally, I think we're pretty close to the floor," said Jon Ekoniak, an analyst at U.S. Bancorp Piper Jaffray, who has a market perform rating on the stock.

Ekoniak noted that Oracle is currently trading near its 10-year low in terms of forward

price-to-earnings ratio. Shares of Oracle closed down 12 cents, or 1.4%, to $8.43 Friday. That price is its lowest since June 1999.

Based on Ekoniak's estimate for fiscal year 2003, Oracle is trading at about 19 times earnings. In the past 10 years, the company's P/E ratio fell to its lowest point, about 18, in 1998.

The stock also is trading in line with a discounted cash-flow (DCF) analysis using a 10% growth rate, according to Goldman Sachs analyst Rick Sherlund. But Sherlund assumes lower earnings than Ekoniak. Sherlund, who has a market outperform rating on Oracle, on Friday reduced his fourth-quarter license revenue estimate and earnings estimates for fiscal years 2002 and 2003. He also lowered his long-term growth estimate to between 10% and 12%, from 15%.

"Factoring our estimate reductions and a slower long-term growth rate into our DCF model suggests a value of approximately $8 to $9, consistent with the current depressed share price," Sherlund wrote in a note released Friday. His firm hasn't done any banking business with Oracle.

On the Floor?
Oracle is trading near 10-year low of its P/E

Analysts differ over how Oracle will perform in fiscal year 2003 compared with fiscal year 2002. Sherlund's new numbers show earnings actually declining to 35 cents a share in 2003 from 38 cents a share in 2002. Ekoniak shows modest growth from 40 cents to 43 cents a share. The consensus estimate gathered by Thomson Financial/First call shows earnings going from 40 cents a share in fiscal year 2002 to 45 cents a share in 2003.

Ian Morton, an analyst at J.P. Morgan H&Q, said close to flat year-over-year growth is probably reasonable. That's because Oracle's fiscal year 2003 includes the second half of calendar year 2002. So if the economy doesn't pick up anytime soon and then software spending lags even more by a quarter or two, Oracle may not reap the rewards of an economic pickup in fiscal year 2003, he explained.

Morton, who has a long-term buy rating on the company's stock, agrees that a "fairly good miss" in the fourth quarter is currently priced into Oracle stock. But he's less bullish than Ekoniak because there's still the possibility that investors will sell when the company reports fourth-quarter numbers in June, he said.

"I don't think there's lot of urgency on the jump-in-and-buy side," Morton said. The stock is unlikely to rise much ahead of earnings and could still slide if the

Nasdaq

falls, he said. His firm hasn't done any banking with Oracle.

In a note earlier this week, Neil Herman of Lehman Brothers, among the first to lower Oracle estimates, wondered if investors are "truly focused on Oracle's long-term franchise." Investors seem to be forgetting that the company is still the dominant database software maker, has 10,000 application customers and has improved its operating margin.

Herman, who has a buy rating on the stock, said he believes that the stock's downside is limited and that eventually some good news about Oracle, or at least an improving macroeconomic environment, will boost share prices. However, he acknowledged he didn't know when that news would arrive. His firm hasn't done any banking with Oracle.

Ekoniak also points to the Oracle's strengths. "The fact is they continue to generate a lot of cash," he said. "I'm actually thinking it's almost time to get back into Oracle." Still, he acknowledges there are still some "fundamental cracks" in Oracle's armor that could hold him back from upgrading his rating to a buy.

Some of those issues hammered the stock this week. They included news of

another executive departure and fears the company will not meet numbers for its fourth quarter, which ends May 31. The company has blamed the economy for its declining revenue, but Oracle also has faced increased database competition from

Microsoft

(MSFT) - Get Report

and

IBM

(IBM) - Get Report

. The company, too, has become embroiled in political intrigue over a $95 million contract with the state of California for software that an auditor found few state agencies said they needed.

Oracle, which has offered to cancel the contract, recognized revenue from it only in the fourth quarter of 2001, said spokesman Jim Finn. He said the amount was actually "a lot less" than $95 million because the contract also involved other parties. He declined to disclose the size of the deal, saying it is company policy not to break out individual contract amounts.

Ekoniak said the management exodus is Oracle's biggest risk. "It's led to a lack of focus on the business," he said. "They

the departing employees are saying these other opportunities are better than Oracle." But given the current economic environment, it's hard to imagine those are better, he added.