ORCL – Market expectations are for Uniform ROA to decline, but management is confident about their private cloud, growth, and M&A activity

March 23, 2022

  • Oracle Corporation (ORCL) currently trades below corporate but above historical averages relative to Uniform earnings, with a 19.3x Uniform P/E (Fwd. V/E’).

  • At these levels, markets are pricing in expectations for Uniform ROA to decline to 26% by 2026, accompanied by 3% Uniform asset growth.

  • Meanwhile, analysts also expect Uniform ROA to compress to 30% in 2023, albeit with stronger 9% Uniform asset growth.

  • If sustained going forward, these levels would imply a stock price closer to $124, representing significant potential equity upside for the firm.

  • Moreover, the firm’s most recent earnings call suggests management is confident about their private cloud, growth, and M&A activity.

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