VALUATION HIGHLIGHTS

1. Cloud services and license support constitutes 86% of the Trefis price estimate for Oracle's stock.
2. Cloud & On-Premise License constitutes 9% of the Trefis price estimate for Oracle's stock.

WHAT HAS CHANGED?

ORCL Stock Performance In Recent Years

Admirably, ORCL stock has outperformed the broader market in each of the last 4 years. Returns for the stock were 37% in 2021, -5% in 2022, 31% in 2023, and 60% in 2024.

In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, 24% in 2023, and 23% in 2024.

Latest Earnings

For Q3 FY 2025 (fiscal ends in May), total revenues were $14.1 billion, up 6% y-o-y. Cloud Services and License Support revenues were $11.0 billion, up 10% y-o-y. Cloud License and On-Premise License decreased by 10% y-o-y. The company reported adjusted earnings of $1.47 per share, up 4% y-o-y.

BUSINESS SUMMARY

Oracle earns money through the sale of enterprise software and associated hardware. The company launched its Gen 2 cloud and Autonomous database to increase the 'as-a-service' component in its offerings.

Cloud services and license support (2024 revenue of $39.4 billion, 74% of total revenue)

Segment revenues are derived from the sale of subscriptions for Oracle Cloud Services and product upgrades.

Cloud license and on-premise license (2024 revenue of $5.0 billion, 10% of total revenue)

Segment revenues are derived from the sale of software licenses to be used on-premise or in the cloud.

Hardware (2024 revenue of $3.1 billion, 6% of total revenue)

Segment revenues are derived from the sale of hardware products and related software.

Services (2024 revenue of $5.4 billion, 10% of total revenue)

Segment revenues are derived from the sale of consulting and technical support services.