Could Oracle Stock Continue Its Rise after Its Fiscal 1Q18 Results?
Oracle stock surged ~33% in 2017 to date
Earlier in this series, we discussed the segments that are poised for growth in the overall cloud space. Oracle (ORCL), due to its dominant position in ERP space, is expected to benefit from this trend.
Oracle had struggled to grow as its on-premise business and database revenues slumped due to increased cloud adoption. The company is close to a turnaround and now expects revenue growth of 4%–6% in fiscal 1Q18.
The strategic acquisition of NetSuite, as well as the robust organic growth of several cloud solutions, helped the company expect growth in its top line. All these positive developments have provided a boost to Oracle stock, which has surged ~33% in 2017 year-to-date.
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Oracle’s cloud offerings increased adoption
Despite a massive surge in Oracle stock, KeyBanc Capital Markets analysts are hopeful of more upside potential in the stock. Oracle stock received an upgrade from “sector-weight” to “overweight” and an initial price target of $61.00 by the firm.
Oracle’s focus on enhancing cloud security offerings has urged analysts to assign a premium price target to Oracle stock. According to Monika Garg, an analyst at KeyBanc Capital Markets, only 3.4% of Oracle’s customers have subscribed to cloud-based services.
Oracle has more than 400,000 enterprise customers that it can convert from legacy on-premise software to cloud-based software. Considering Oracle’s late transition to the cloud, any indication of progress in its cloud operations could give the market a spark.