Shares of Oracle got a jolt on Friday, jumping 4% after an impressive earnings release. But perhaps more important than a single quarter's results is that many analysts are now seeing signs that the world's second-largest software company is turning a corner.
Selling software to corporations is an ultra-competitive business, and to get a leg up, Oracle set out years ago to become a one-stop shop for customers' needs. The company has not only developed new products itself but also has expanded its portfolio of products by buying other software firms. In particular, it's bought companies with applications software, which complements its bread-and-butter database management software.
It may be a smart strategy on paper, but pulling it off is another matter. The trick for Oracle is integrating its new businesses and persuading customers to get on board with the plan.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
It finally looks like Oracle's efforts may be succeeding, some analysts say. Oracle's most recent quarterly earnings, released on Thursday, showed profits reached 29 cents per share in the fiscal fourth quarter, up 12% from a year ago. Friedman Billings Ramsey analyst David Hilal, who was among the many analysts to weigh in with notes to clients on Friday, was impressed with strong growth across the board. Revenues from database licenses grew 18%, and revenues from application licenses -- a faster-growing field -- increased 83%.
Hilal also said that the company is landing a greater number of licensing deals than a year ago, and that the deals are larger. That suggests customers are embracing Oracle's expanded line of products and services and shows a vote of confidence in the firm's ability to integrate its different pieces, Hilal says. He thinks the stock (symbol ORCL) can reach $17 over the next 12 months, up from Friday's close of $15.
The stock trades at 16 times the 93 cents that analysts expect the company to earn per share in the fiscal year that ends next May.
-
I'm 57 with $4.1 million and looking to retire abroad in a few years. I no longer see the point in contributing to my 401(k). Am I wrong?We ask financial experts for advice.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on RetirementWhile some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.
-
S&P 500 Hits New High After Oracle Earnings: Stock Market TodayAnother down day for Apple held the Dow Jones Industrial Average back, though.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages — until it wasn't.
-
What Tariffs Mean for Your Sector ExposureNew, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
How to Invest for a Fall Interest Rate Cut by the FedA lot can happen between now and then, but the probability the Fed cuts interest rates in September is back above 80%.
-
Are Buffett and Berkshire About to Bail on Kraft Heinz Stock?Warren Buffett and Berkshire Hathaway own a lot of Kraft Heinz stock, so what happens when they decide to sell KHC?
-
How the Stock Market Performed in the First 6 Months of Trump's Second TermSix months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
If You'd Put $1,000 Into Berkshire Hathaway Stock 20 Years Ago, Here's What You'd Have TodayBerkshire Hathaway is a long-time market beater, but the easy money in BRK.B has already been made.
