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Oracle stock analysis. Ticker: $ORCL

Oracle stock is up 20% this year taking the market cap of 356 billion. With 12 billion of cash and 88 billion of debt the enterprise value is 432 billion.

Revenue over the last 12 months has grown 9 and a half percent to just under 53 billion with 10.6 billion of net income and almost 20 billion of adjusted ebitda. So Oracle stock is currently valued at 34 times earnings or 22 times ebitda.

That valuation doesn’t look too attractive when considering Oracle’s recent history. Revenues between 2015 and 2020 grew by only 2% as companies shifted from on-prem services to cloud providers like AWS. Revenue did grow 18% in 2023 but a large part of that growth came from the acquisition of healthcare business Cerner.

Mediocre growth and a large chunk of debt may not sound too compelling but Oracle stock is close to an all-time high because of what it might do in the future not what it’s done in the past.

Most importantly, the company is seeing huge demand for cloud infrastructure driven by AI. It’s building data centers at a record pace and recently signed an infrastructure contract with Nvidia.

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