Oracle Corporation develops, manufactures, markets, sells, hosts, and supports database and middleware software, application software, cloud infrastructure, hardware systems, and related services worldwide. The company was founded in 1977 and is based in Redwood City, California.
ORCL Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for ORCL, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Oracle Corp ranked in the 32th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 48.5%. In terms of the factors that were most noteworthy in this DCF analysis for ORCL, they are:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 72. Its equity weight surpasses that of merely 22.07% of free cash flow generating stocks in the Technology sector.
Its compound free cash flow growth rate, as measured over the past 5.75 years, is -0.04% -- higher than merely 23.13% of stocks in our DCF forecasting set.
ORCL's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than just 14.76% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as ORCL, try MLAB, FN, IT, LSCC, and MIME.
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