Market Overview

Why Oracle Expects 2018 To Be The Cloud Sales 'Tipping Point'

Why Oracle Expects 2018 To Be The Cloud Sales 'Tipping Point'

Argus analyst Joseph Bonner upgraded Oracle Corporation (NYSE: ORCL) to Buy with a $61 price target following strong fourth-quarter 2017 earning results Wednesday.

The company’s non-GAAP diluted EPS rose 10 percent year-over-year to $0.89 and revenue rose 3 percent to $10.95 billion, both being strong beats.

Oracle’s Q4 cloud sales were also up 58 percent to $1.4 billion. The segment serves as the base for Bonner’s bull thesis.

Cloud Coverage

“Oracle’s primary execution task is now to accelerate the conversion of its blue chip customer base to the cloud,” said Bonner in a note.

Fiscal 2018 could be tipping point for cloud revenue growth outpacing on-premise software licenses. Oracle’s extensive package of cloud services, already showing margin expansion, will allow it to compete with the sector’s heavy hitters, including Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) and, inc. (NYSE: CRM).

Management called out, Inc. (NASDAQ: AMZN)’s Web Services in its earnings report, saying Oracle’s Infrastructure-as-a-Service segment beats it in cost and speed.

Management also expects Oracle’s acquisition of NetSuite last fall to be accretive to its cloud business by boosting its presence in the small and medium enterprise markets.

Bonner agrees, but doubts the company will maintain both services, which he called a duplicative effort, in the long-term, instead choosing one technology set or integrating them.

Bonner forecasts fiscal 2018 EPS at $2.97 and 8.5 percent revenue growth.

Related Links:

Surprised Reactions To Oracle's Q4 Beat

Oracle Shares Have Outperformed Year To Date; Can The Momentum Continue After The Q4 Print?
Image Credit: By Travelarz - Own work, CC BY-SA 3.0 pl, via Wikimedia Commons

Latest Ratings for ORCL

Sep 2020RBC CapitalUpgradesSector PerformOutperform
Sep 2020B of A SecuritiesMaintainsNeutral
Sep 2020Credit SuisseMaintainsOutperform

View More Analyst Ratings for ORCL
View the Latest Analyst Ratings


Related Articles (MSFT + ORCL)

View Comments and Join the Discussion!

Posted-In: Analyst Color Earnings Long Ideas News Guidance Upgrades Analyst Ratings Tech Best of Benzinga

Latest Ratings

JBLRBC CapitalMaintains38.0
COSTRBC CapitalMaintains412.0
COSTMKM PartnersMaintains325.0
MTNTruist SecuritiesMaintains243.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at