Oracle Corporation (NYSE:ORCL), founded in 1977, develops, hosts, and supports database and middleware software, application software, cloud infrastructure, hardware systems, and related services worldwide. It operates via four segments – cloud services and license support, cloud license and on-premises license, hardware, and services.
Oracle’s revenue and EPS grew at CAGRs of 0.5% and 12.7%, respectively, over the past three years. Also, the CAGR of the company’s free cash flow has been 5.1%.
The market expects Oracle’s revenue to increase 32.1% in the current quarter (ending February 28, 2021), 2.6% in the current year (ending May 31, 2021) and 2.5% next year. Oracle’s EPS is expected to grow 14.4% in the current quarter, 13.2% in the current year and 7.3% next year. Moreover, its EPS is expected to grow at a rate of 10.6% per annum over the next five years. Oracle is more profitable, with a gross profit margin of 80.3%. Oracle’s ROE and ROA of 83.7% and 9%, respectively, compare favorably with SAP’s 17.4% and 7.4%.
Oracle has opened 13 additional Cloud datacenter regions in 2020 and currently operates 29 regions globally. Oracle is focusing on more aggressive expansion plan and expects to have 38 cloud regions live by mid-2021.
Therefore, Oracle is a good long-term investments for value investors.