Why Oracle (ORCL) Dipped More Than Broader Market Today

Oracle (ORCL) closed the most recent trading day at $146.71, moving -2.53% from the previous trading session. This change lagged the S&P 500's 0.52% loss on the day. Meanwhile, the Dow lost 0.51%, and the Nasdaq, a tech-heavy index, lost 0.32%.

The stock of software maker has risen by 19.07% in the past month, leading the Computer and Technology sector's gain of 1.99% and the S&P 500's gain of 3.3%.

The investment community will be closely monitoring the performance of Oracle in its forthcoming earnings report. The company is predicted to post an EPS of $1.72, indicating a 17.01% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $19.14 billion, showing a 28.24% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $8.03 per share and a revenue of $89.8 billion, demonstrating changes of +5.24% and +33.32%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Oracle. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.02% higher within the past month. Oracle presently features a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that Oracle has a Forward P/E ratio of 18.74 right now. This denotes a premium relative to the industry average Forward P/E of 18.32.

Also, we should mention that ORCL has a PEG ratio of 0.76. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Computer - Software industry was having an average PEG ratio of 1.59.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 87, which puts it in the top 36% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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