It’s been a long time since I’ve written on Oracle (ORCL), mostly because it gets kinda boring saying the same things about the same companies - there are only so many ways to say “They generate good cash flow, but they haven’t made the right strategic choices to drive meaningful growth”. Since that last write-up, where I thought the shares had some value but weren’t necessarily compelling, they have generated a total return of around 33% - better than the S&P over that time, but below the returns from the likes of Microsoft (MSFT), Salesforce.com (CRM), and SAP (SAP).
Not a lot has changed. Oracle hasn’t seen a mid-single digit quarterly billings growth rate since mid-FY’18, though an easier comp in this year’s fourth quarter should allow another one. I like the growth in Fusion and opportunities like Gen2 OCI and Autonomous DB, but to borrow a concept from hockey, Oracle strikes me as a company that’s always chasing the puck, not one that reads the action on the ice and skates to where the action will be. The shares do look modestly undervalued, and I don’t think investors will get hurt badly here (unless the entire market, or at least the tech sector, gets trashed), but I also don’t think they’ll outperform over the long term with Oracle.
Read more here:
No comments:
Post a Comment