William Blair Keeps Oracle Corporation (ORCL) at Market Perform; Would Wait for More Attractive Entry Point

In a research report released today, William Blair analyst Jason Ader reiterated a Market Perform rating on Oracle Corporation (NYSE:ORCL), after the technology giant missed both revenue and EPS estimates in its fiscal-fourth quarter 2015 earnings, sending shares down 4.83% to $42.74.

Ader wrote, “Foreign exchange clouded what was essentially a mixed quarter on a constant-currency basis—slightly soft top line but a small beat on EPS— while constant-currency guidance is difficult to compare with prior Street expectations. Declines in on-premise software continue to offset gains in cloud and engineered systems, hurting revenue recognition and cash profitability in the short term. Nevertheless, profitability remains robust and management continues to return cash at a high rate. Ultimately, the company is sorting through several mix shifts and we await a better entry point.”

Bottom line, “We appreciate the stability of the business (aided by the large, consistent, and high-margin software support business), as well as management’s long-term approach and commitment to returning cash to shareholders. Ultimately, we continue to monitor the situation for a product mix inflection point, consistency of execution on both software and hardware, and a more attractive entry point.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jason Ader has a total average return of 10.5% and a 65.5% success rate. Ader is ranked #645 out of 3632 analysts.

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