ORCL

Oracle Raises Dividend 25%

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Image Source: TradingView By Brian Nelson, CFA Oracle (ORCL) reported third quarter fiscal 2025 results March 10 that missed the consensus estimates, but a strong Remaining Performance Obligation number and a dividend raise were enough for investors. Total revenue increased 6% in USD and 8% in constant currency for the fiscal third quarter. GAAP earnings per share advanced 20% year-over-year, while non-GAAP earnings per share increased 4%, to $1.47. Total Remaining Performance Obligations jumped 62% in USD (up 63% in constant currency), to $130 billion. Management was upbeat about its outlook: Oracle signed sales contracts for more than $48 billion in Q3. This record sales number pushed our Remaining Performance Obligations, or RPO, up 63% to over $130 billion. We … Read more

Oracle’s Remaining Performance Obligations (RPO) Growth Speaks to Accelerated Expansion

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Image Source: Oracle By Brian Nelson, CFA On December 9, Oracle (ORCL) reported lower than expected second quarter fiscal 2025 results with revenue and non-GAAP earnings per share coming in lower than the consensus forecasts. Total revenue was up 9% year-over-year in both USD and constant currency, while GAAP earnings per share increased 24% and non-GAAP earnings per share advanced 10%, to $1.47. Cloud services and license support revenues increased 12% year-over-year in both USD and constant currency, while cloud license and on-premise license revenue nudged up 1% in USD and 3% in constant currency. Management’s commentary was upbeat in the press release: Record level AI demand drove Oracle Cloud Infrastructure revenue up 52% in Q2, a much higher growth … Read more

Oracle Expects Increased Revenue Growth Throughout Fiscal 2025

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Image: Oracle’s shares have performed quite well during the past couple years. By Brian Nelson, CFA Oracle (ORCL) reported better than expected fiscal first quarter results on September 9, with revenue and non-GAAP earnings per share exceeding the consensus forecast. Total revenue expanded 7% in the quarter (up 8% in constant currency), while non-GAAP earnings per share advanced 17%, to $1.39 (up 18% in constant currency). Cloud services revenue advanced 21% (up 22% in constant currency), while cloud license and on-premise license revenues increased 7% (up 8% in constant currency). Non-GAAP operating income increased 13%, to $5.7 billion, up 14% in constant currency, while its non-GAAP operating margin came in at 43%. Non-GAAP net income increased 18%, to $4 billion, … Read more

Paper: Value and Momentum Within Stocks, Too

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Please select the image below to download, “Value and Momentum Within Stocks, Too:” Abstract: This paper strives to advance the field of finance in four ways: 1) it extends the theory of the “The Arithmetic of Active Management” to the investor level; 2) it addresses certain data problems of factor-based methods, namely with respect to value and book-to-market ratios, while introducing price-to-fair-value ratios in a factor-based approach; 3) it may lay the foundation for academic literature regarding the Valuentum, the value-timing, and ultra-momentum factors; and 4) it walks through the potential relative outperformance that may be harvested at the intersection of relevant, unique and compensated factors within individual stocks. To download the full report, please click here (pdf). ———- Actual results … Read more

Oracle Misses in Q4 But Bookings Performance and Outlook Strong

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Image: Oracle’s shares have done quite well since the beginning of 2023, and management’s outlook speaks to continued strength. By Brian Nelson, CFA On June 11, Oracle (ORCL) reported fourth quarter fiscal 2024 results that missed expectations on the top and bottom line, but the company’s total remaining performance obligations increased a whopping 44% on a year-over-year basis, to $98 billion–up $18 billion from the fiscal third quarter. Total quarterly revenue advanced 4% in constant currency, while non-GAAP operating income jumped 9% in constant currency. Management commented positively in the quarterly earnings press release about the pace of orders and the visibility it provides into the coming fiscal years: In Q3 and Q4, Oracle signed the largest sales contracts in … Read more

Oracle Hits Optimistic Note in Fiscal Third Quarter

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Image Source: Peter Kaminski By Brian Nelson, CFA On March 11, Oracle (ORCL) reported strong third-quarter fiscal 2024 results that showed total revenue advancing 7% on both a GAAP and constant-currency basis, roughly in-line with expectations, and non-GAAP earnings per share increasing 16%, to $1.41, beating the consensus forecast. Revenue growth rates were strong across the board, and the company’s total Remaining Performance Obligations soared 29%, to $80 billion at the end of the period. Though the quarter was solid, what the Street liked the most was management’s commentary in the press release: Large new cloud infrastructure contracts signed in Q3 drove Oracle’s total Remaining Performance Obligations up 29% to over $80 billion—an all-time record. We expect to continue receiving … Read more

We Remain Bullish; Is This 1995 – The Beginning of a Huge Stock Market Run?

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Image: Large cap growth stocks have trounced the performance of the S&P 500, REITs, and bonds since the beginning of 2023. We expect continued outperformance in this area of the market. By Brian Nelson, CFA We’re now roughly four years past the depths of the COVID-19 meltdown, where equities collapsed in February and March of 2020. As the markets began to recover through 2020, our long-term conviction in equities only grew stronger. We think the biggest risk for long-term investors remains staying out of the market on the basis of what could be considered stretched valuation multiples. As we outlined heavily in the book Value Trap, valuation multiples hardly tell the complete story about a company and often omit key … Read more

12 Reasons to Stay Aggressive in 2024

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By Brian Nelson, CFA 1. The Fed has signaled that rate cuts could start with inflation at a 2 handle (2 point something) and not at exactly 2.0%. That means that the Fed may become anticipatory to prevent overshooting to the downside with inflation. We see this as positive for long-duration equities, particularly those whose free cash flow generation is robust in the out-years, inclusive of big cap tech and the stylistic area of large cap growth. 2. Unemployment is at structural lows of 3.7%. Employers are working hard to keep talent on board, and with each paycheck, employees are pumping more and more money into the stock market via retirement accounts. This tailwind remains a stiff one and will … Read more

Net-Cash-Rich, Free-Cash-Flow Generating Powerhouse Salesforce Has a Long Growth Runway

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Image Source: Salesforce By Brian Nelson, CFA On November 29, Salesforce (CRM) reported excellent fiscal third-quarter results and issued an outlook for its fiscal fourth quarter that came in better than expectations. The Dow Jones Industrial Average component’s results were welcome news as the bellwether revealed that spending on cloud-based CRM software remains robust. In the quarter ending October 31, revenue advanced 11% on a year-over-year basis, while non-GAAP diluted earnings per share came in at a solid $2.11. Its outlook was rosier than what the Street was expecting. For the fiscal fourth quarter, the company is targeting non-GAAP earnings per share in the range of $2.25-$2.26 per share, better than the consensus forecast of $2.18. The strong quarter only … Read more

Use Both the Dividend Cushion Ratio (Probability of a Dividend Cut) and the Qualitative Dividend Ratings in Your Assessment of the Payout

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The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%. By Brian Nelson, CFA Dividend investing has probably never been as popular as the past couple years. Remember, however, the dividend is capital appreciation that otherwise would have been achieved had the dividend not been paid. If you had a stock that was $10, and it paid a $1 dividend, you don’t have a $10 stock and … Read more