Sentence with x, that was nothing. Investors apparently expected more from the numbers of SAP rival Oracle. This again declining revenue growth was settled with a sharp sell-off of the stock. In yesterday’s afternoon trading, the papers of the database giant recorded a price drop of 11%.

Oracle – market leader in databases …. Oracle is one of the world’s leading providers of soft- and hardware products. The company develops, produces, markets and distributes database and middleware software solutions, application software and computer hardware such as servers and storage systems.

The company’s customers include both private and business customers. For small and larger companies, government organizations or agencies, Oracle offers comprehensive packages as well as additional services and develops individual solution concepts in close coordination with the different customers. Private customers can also assemble suitable software and hardware from the product range for their purposes.

…. with declining growth dynamics Now to the current figures: In the past second quarter (note: ended on November 30), Oracle increased sales by 5% to 12.91 billion dollars. This missed analyst estimates by 110 million dollars (source: Seeking Alpha). Accordingly, the revenue dynamics of the previous quarters could not be achieved (Q1 2023/2024: +9%; Q4 2023: +17% Q3 2023: +18%).

The reason for the weakened growth dynamics was partly due to the challenging economic environment. On the other hand, according to the company, the competition in the booming cloud computing sector intensified.

Cloud market continues to be strong Meanwhile, the cloud market showed high growth: In this segment, sales rose by 25% (previous quarter: +30%) to 4.8 billion dollars. This means that the cloud business now accounts for almost 37% of total group revenues.

In particular, according to company CEO Safra Catz, the demand for cloud infrastructure and generative AI is a particular driver in this area.

Profit margins barely above expectations Meanwhile, the operating profit margin went up from 25% to 28% year-on-year. In the end, a net result of 2.503 billion dollars remained. Meanwhile, the adjusted result was $1.34 per share, marginally exceeding analyst estimates by one cent.

Meanwhile, Oracle is significantly expanding its capacity. According to the company, the technology giant is expanding 66 existing cloud data centers and will build 100 new cloud data centers to meet the „growing demand“.

Analysts have mixed opinions Meanwhile, analysts are divided. On average, the experts expect a profit of 5.54 dollars per share for 2024. Thus, the Oracle stock is currently trading at 18 times the price-earnings ratio. Of 34 experts dealing with the title, 14 recommend buying the stock. Another 19 bankers have a hold vote, while 1 analyst classifies the stock as a sale. The range of target prices is extremely wide and ranges from 92.60 dollars to 150 dollars. The average target price of all analysts is 128.54 dollars, about 26% above the current stock price (102 dollars).