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Comparing Oracle’s and Peers’ Valuation

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Market capitalization and valuation

On June 6, Oracle’s (ORCL) market capitalization was $194.9 billion, whereas Microsoft (MSFT), IBM (IBM), and Accenture (ACN), had market caps of $787.5 billion, $132.8 billion, and $104.6 billion, respectively, as shown in the graph below. Oracle was trading at a forward EV[1.enterprise value]-to-EBITDA multiple of ~9.9x on June 6, while Microsoft, IBM, and Accenture had forward EV-to-EBITDA multiples of ~16.3x, ~8.8x, and, ~15.3x, respectively. Oracle was trading at a forward PE multiple of ~19.2x, while Microsoft, IBM, and Accenture had forward PE multiples of ~28.5x, ~12.2x, and ~27.6x, respectively.

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Bollinger Band

Oracle stock closed at $47.75 on June 6, close to its lower Bollinger Band of $46. This value indicates that the stock is oversold, and investors may interpret it as a “buy” signal.

Short interest ratio and stock returns

On June 6, Oracle’s short interest as a percentage of its shares outstanding was ~2.5%. Generally, a short interest ratio above 40% implies an impending stock price decline. Oracle stock has climbed 5.2% in the last year, 4.2% in the last month, and 1.7% in the last five days.

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