ORCL Stock Risk & Deep Value Analysis
Oracle Corp
Technology • Software - Infrastructure
DVR Score
out of 10
What You Need to Know About ORCL Stock
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We ran ORCL through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
ORCL Risk Analysis & Red Flags
What Could Go Wrong
Oracle's aggressive $50B CapEx plan is driving substantial negative free cash flow and a rapidly increasing net debt position. If the return on these investments does not materialize quickly enough through strong revenue growth and improved margins, or if interest rates remain high, the company could face significant financial strain, requiring further capital raises that could dilute shareholders or elevate debt to unsustainable levels, dampening investor confidence.
Risk Matrix
Overall
Moderate
Financial
High
Market
Medium
Competitive
Medium
Execution
Medium
Regulatory
Low
Red Flags
- ⚠
Negative free cash flow ($48.25B TTM CapEx) is a major financial drain.
- ⚠
Rapidly increasing net debt position poses long-term solvency concerns if growth slows.
- ⚠
Gross margin compression from 70.3% to 64.6% due to lower-margin infrastructure build-out.
- ⚠
Significant $2.1B restructuring costs in FY2026 indicate operational shifts with near-term impact.
Upcoming Risk Events
- 📅
Disappointing CapEx guidance or slower-than-expected FCF improvement
- 📅
Increased competitive pressure in AI/cloud from AWS, Azure, GCP
- 📅
Global economic slowdown impacting enterprise IT spending
When to Reconsider
- 🚪
If OCI and AI Infrastructure revenue growth rates fall below 100% and 50% YoY respectively for two consecutive quarters.
- 🚪
If total debt-to-equity ratio significantly exceeds 4.0, indicating escalating financial leverage.
- 🚪
If Oracle fails to show a clear path to positive free cash flow within the next 18-24 months.
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What Does Oracle Corp (ORCL) Do?
Market Cap
$488.50B
Sector
Technology
Industry
Software - Infrastructure
Employees
162,000
Oracle Corporation offers products and services that address enterprise information technology environments worldwide. Its Oracle cloud software as a service offering include various cloud software applications, including Oracle Fusion cloud enterprise resource planning ERP, Oracle Fusion cloud enterprise performance management EPM, Oracle Fusion cloud supply chain and manufacturing management SCM, Oracle Fusion cloud human capital management HCM, and NetSuite applications suite, Oracle Health applications, as well as Oracle Fusion Sales, Service, and Marketing. The company also offers cloud-based industry solutions for various industries; Oracle cloud license and on-premise license; and Oracle license support services. In addition, it provides cloud and license business' infrastructure technologies, such as the Oracle Database and MySQL Database; Java, a software development language; and middleware, including development tools and others. The company's cloud and license business' infrastructure technologies also comprise cloud-based compute, storage, and networking capabilities; and Oracle autonomous database, as well as AI, Internet-of-Things, machine learning, digital assistant, and blockchain. Further, it provides hardware products and other hardware-related software offerings, including Oracle engineered systems, enterprise servers, storage solutions, industry-specific hardware, virtualization software, operating systems, management software, and related hardware support services, and consulting and advanced customer services. It markets and sells its cloud, license, hardware, support, and services offerings directly to businesses in various industries, government agencies, and educational institutions, as well as through indirect channels. Oracle Corporation has a strategic alliance with Metron, Inc. The company was founded in 1977 and is headquartered in Austin, Texas.
Visit Oracle Corp WebsiteInvestment Thesis
Oracle is undergoing a successful, aggressive transformation into a leading AI and cloud infrastructure provider, leveraging its deep enterprise relationships and proprietary technology. Its significant RPO and exceptional growth in key cloud segments position it to capture substantial market share in the most critical technological areas, despite the near-term financial strain from its massive CapEx investment. The long-term upside is driven by its ability to convert these investments into sustained, high-margin cloud revenue.
Is ORCL Stock Undervalued?
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ORCL Price Targets & Strategy
12-Month Target
$259.00
Bull Case
$300.00
Bear Case
$150.00
Valuation Basis
35x forward P/E applied to estimated FY2027 EPS of $7.40 (based on continued 21.8% growth from FY2026 consensus of $6.08).
Entry Strategy
Consider dollar-cost averaging on dips towards the $160-$170 range, which aligns with recent support zones and consolidates post-earnings gains.
Exit Strategy
Consider taking partial profits if the stock approaches the $280-$300 level. A stop-loss order at $160 (below recent consolidation) is recommended to manage risk.
Portfolio Allocation
3-5% for moderate risk tolerance due to mega-cap size but aggressive growth strategy; 5-8% for aggressive investors.
Price Targets & Strategy
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Is ORCL Financially Healthy?
Valuation
P/E Ratio
30.14
Forward P/E
27.20
EV/EBITDA
20.71
PEG Ratio
1.02
Price/Book
11.20
Price/Sales
8.91
Profitability
Gross Margin
67.08%
Operating Margin
30.56%
Net Margin
25.30%
Return on Equity
57.35%
Revenue Growth
14.87%
EPS
$5.58
Balance Sheet
Current Ratio
0.75
Quick Ratio
0.63
Debt/Equity
4.67
Total Debt
$45.00B
Cash & Equivalents
$12.30B
Cash Flow
Operating Cash Flow
$18.50B
Free Cash Flow
-$29.75B
EBITDA
$23.90B
Other
Beta (Volatility)
1.54
Dividend Yield
1.24%
Does ORCL Have a Competitive Moat?
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🏰 Wide
Moat Trend
Expanding
Moat Sources
4 Identified
Oracle's moat is durable due to the deep integration of its database and ERP solutions within enterprise IT environments, creating extremely high switching costs. Its expanding OCI global infrastructure and specialized AI capabilities further reinforce this by offering unique performance and security benefits that are hard to replicate, especially for critical enterprise workloads.
Moat Erosion Risks
- •Commoditization of basic cloud infrastructure services, intensifying price competition.
- •Emergence of open-source or fully managed third-party database solutions reducing reliance on Oracle's proprietary offerings.
- •Failure to quickly scale OCI and AI infrastructure to meet demand, ceding market share to hyperscalers.
ORCL Competitive Moat Analysis
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ORCL Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral to Bullish. Strong operational performance and AI pivot generate positive discussions, but megacap status limits viral retail investor enthusiasm for 10x potential.
Institutional Sentiment
Positive. Analyst consensus is bullish with a median price target suggesting substantial upside, driven by confidence in Oracle's AI/cloud strategy despite some short-term volatility concerns.
Insider Activity (Form 4)
Stuart Levey, EVP & Chief Legal Officer, acquired 346.321 RSU dividend equivalents at $173.28 on April 24, 2026, a compensation-related grant, not discretionary buying/selling.
Options Flow
Normal options activity observed; institutional positioning likely reflects a mixed view of high growth potential versus valuation concerns.
Earnings Intelligence
Next Earnings
Estimated early-June 2026 (for Q4 FY2026)
Surprise Probability
Medium-High (Q3 beat estimates, consistent strong cloud performance)
Historical Earnings Pattern
Oracle typically sees positive stock price reactions to strong cloud/AI growth numbers and RPO beats, but can experience pullbacks if CapEx concerns overshadow growth or guidance disappoints.
Key Metrics to Watch
Competitive Position
Top Competitor
Microsoft Azure
Market Share Trend
Gaining market share aggressively in AI infrastructure and multicloud database segments, while maintaining a strong but slower-growing position in cloud applications.
Valuation vs Peers
Oracle generally trades at a discount on a P/E basis compared to hyper-growth pure-play cloud companies like Snowflake or Datadog, but at a premium to legacy software peers. It's often valued similarly to Microsoft or Amazon on an EV/Sales basis for its cloud segment, but the overall blended valuation reflects its significant legacy business.
Competitive Advantages
- •Established enterprise customer base with high switching costs for database and ERP solutions.
- •Proprietary database technology and integrated software/hardware stack.
- •Growing global footprint of OCI data centers with a focus on high-performance AI workloads.
- •Strategic partnerships (e.g., Bloom Energy) to enhance cloud infrastructure capabilities.
Market Intelligence
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What Could Drive ORCL Stock Higher?
Near-Term (0-6 months)
- •Q4 FY2026 Earnings Report (expected early-June 2026)
- •Further updates on large AI infrastructure contracts and partnerships
- •Successful integration of new CFO Hilary Maxson and progress on restructuring
Medium-Term (6-18 months)
- •Continued acceleration and monetization of OCI/AI infrastructure, converting RPO to revenue
- •Expansion of multi-cloud database offerings and market share gains
- •Demonstrated improvements in gross margins for AI infrastructure services as scale increases
Long-Term (18+ months)
- •Establishment as a dominant global player in foundational AI infrastructure, rivaling hyperscalers
- •Disruption of traditional cloud computing models through sovereign cloud and distributed cloud offerings
- •Expansion of cloud applications (Fusion, NetSuite) into new enterprise verticals and geographies
Catalysts & Growth Drivers
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What's the Bull Case for ORCL?
- ✓
Acceleration in OCI and AI infrastructure gross margins
- ✓
Consistent growth in RPO and its conversion rate to revenue
- ✓
Improvement in Free Cash Flow (FCF) despite ongoing CapEx
Bull Case Analysis
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Competing with ORCL
See how Oracle Corp compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Oracle Corp ORCL | $488.5B | 4.0 | 30.1 | $65.4B | 25.3% | 14.9% | |
Apple Inc AAPL | $3.9T | 1.5 | 33.2 | $391.0B | 27.0% | 10.1% | Compare → |
Alphabet Inc GOOGL | $4.7T | 1.0 | 29.1 | $402.8B | 37.9% | 17.4% | Compare → |
Meta Platforms Inc META | — | 5.1 | 15.7 | — | 30.1% | 22.2% | Compare → |
Microsoft Corp MSFT | — | 0.5 | — | — | — | — | Compare → |
NVIDIA Corp NVDA | $4.4T | 5.3 | 38.5 | $215.9B | 55.6% | 65.0% | Compare → |
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How Oracle Corp Makes Money
Oracle generates revenue primarily by providing a comprehensive suite of enterprise technology products and services, pivoting from traditional on-premise software licenses to cloud-based subscriptions. This includes a leading database management system, enterprise resource planning (ERP) software, supply chain management (SCM), human capital management (HCM), and most crucially, its rapidly growing Oracle Cloud Infrastructure (OCI) which offers infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) to run various workloads, including high-performance AI applications, for large corporations and governments globally.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Oracle Corp (ORCL)?
As of May 2, 2026, Oracle Corp has a DVR Score of 4.0 out of 10, placing it in the "Proceed with Caution" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Oracle Corp?
Oracle Corp's market capitalization is approximately $488.5B. The company operates in the Technology sector within the Software - Infrastructure industry.
What ticker symbol does Oracle Corp use?
ORCL is the ticker symbol for Oracle Corp. The company trades on the NYQ.
What is the risk level for ORCL stock?
Our analysis rates Oracle Corp's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of ORCL?
Oracle Corp currently has a price-to-earnings (P/E) ratio of 30.1. This is above the market average, suggesting the stock may be priced for high growth expectations.
Does Oracle Corp pay a dividend?
Yes, Oracle Corp pays a dividend with a current yield of approximately 1.24%.
Is Oracle Corp's revenue growing?
Oracle Corp has reported revenue growth of 14.9%. The company is showing strong top-line momentum.
Is ORCL stock profitable?
Oracle Corp has a profit margin of 25.3%. This indicates strong profitability.
How often is the ORCL DVR analysis updated?
Our AI-powered analysis of Oracle Corp is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on May 2, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for ORCL (Oracle Corp) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.