Oracle Corporation (ORCL) Stock Dips 7% on Cloudy Cloud Revenue; Brian White Remains Bullish

Shares of software giant Oracle Corporation (NYSE:ORCL) are down almost 7% to $46.80, after the company followed a better-than-expected fiscal second-quarter report with a disappointing cloud revenue growth.

Specifically, Oracle reported revenue of $9.63 billion, beating the consensus estimate of $9.57 billion, and up 6% from the year-ago quarter. It reported adjusted earnings of 70 cents per share, beating the consensus estimate of 68 cents. However, cloud revenue of $1.50 billion came up short of consensus expectations of $1.56 billion.

Oracle CEO Safra Catz commented, “Overall cloud revenue growth of 44% drove our quarterly revenue and earnings higher,” said Oracle CEO, Safra Catz. “With non-GAAP Cloud SaaS Applications growth of 49% leading the way, Oracle delivered 14% non-GAAP earnings per share growth and 6% overall revenue growth. Our success in the quarter was based on the increasing scale and the gathering momentum in our cloud business. I expect the business to continue to grow and strengthen over the coming quarters.”

“Our Fusion ERP and Fusion HCM SaaS applications suite revenues grew 65% in the quarter,” said Oracle CEO, Mark Hurd. “We are now the clear market leader in enterprise back-office SaaS applications with over 5,000 Fusion customers. And we expect to extend our lead by selling around $2 billion in new enterprise SaaS application cloud subscriptions over the coming four quarters. That’s more new SaaS sales than any of our competitors.”

Drexel Hamilton analyst Brian White opined, “We believe the new innovations announced at Oracle OpenWorld in early October can take Oracle’s cloud portfolio to a whole new level and we believe will support the stock in the coming year.”

White reiterates a Buy rating on ORCL, with a price target of $62, which implies an upside of 24% from current levels. Separately, on December 6, RBC’s Ross MacMillan maintained a Buy rating on the stock and has a price target of $53.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Brian White and Ross MacMillan have a yearly average return of 13.6% and 25.4% respectively. White has a success rate of 67% and is ranked #107 out of 4720 analysts, while MacMillan has a success rate of 83% and is ranked #10.

Sentiment on the street is mostly bullish on ORCL stock. Out of 16 analysts who cover the stock, 13 suggest a Buy rating and 3 recommend to Hold the stock. The 12-month average price target assigned to the stock is $58.23, which implies an upside of 16% from current levels.

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