Oracle Q1 Earnings What to Anticipate
The software behemoth Oracle (NYSE: ORCL) is set to unveil its first-quarter fiscal year 2024 results after today’s market closure. Amidst prevailing macroeconomic uncertainties, the company finds itself amidst an unparalleled surge in demand for its cloud services, particularly in the realm of artificial intelligence (AI). This surge is expected to underpin Q1 fiscal year revenues and bolster earnings.
During the Fiscal Q4 2023 conference call, Oracle highlighted the remarkable attributes of its cloud data centres, which boast high-bandwidth and low-latency Remote Direct Memory Access (RDMA) networks. These attributes render them supremely well-suited for constructing large-scale graphics processing unit (GPU) clusters, primarily employed in the training of expansive generative large-language models. Consequently, Oracle’s Gen2 Cloud has emerged as the preferred choice for AI development companies seeking to train their large language models, presenting substantial growth prospects for the company.
Against this backdrop, let’s delve into the analysts’ consensus projections for Q1 FY24.
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Q1 Earnings: Analysts’ Projections
Is Oracle Stock Poised for an Uptick?
Q1 Earnings: Analysts’ Projections
Analysts anticipate that Oracle will announce total revenues of $12.45 billion in Q1 FY24, marking a rise from the prior-year quarter’s $11.4 billion.
This year-over-year expansion underscores the enduring robustness of the company’s cloud enterprise.
Oracle anticipates that its total cloud revenue, excluding Cerner (acquired last year),
will experience an uptick ranging between 28% to 30% on a constant currency basis in Q1 FY24.
On September 7, Jefferies analyst Brent Thill, buoyed by the momentum in Oracle’s cloud infrastructure and AI demand,
revised his price target for Oracle stock upwards to $145 from $135. Thill retained a Buy rating for ORCL shares.
Echoing similar sentiments, Siti Panigrahi of Mizuho Securities retains an optimistic outlook for Oracle stock in advance of Q1 FY24 earnings.
In a communication to investors dated September 6, Panigrahi expressed his expectation for Oracle to deliver robust Q1 FY24 results,
primarily driven by its cloud operations.
Meanwhile, Monness analyst Brian White reaffirmed a Buy rating on Oracle stock last week and anticipates that the company will meet the revenue expectation of $12.45 billion, notwithstanding the seasonally subdued nature of Fiscal Q1.
Thanks to the projected sales improvement, analysts foresee Oracle reporting earnings of $1.15 per share in Q1 FY24,
denoting an 11.7% year-over-year increment. Oracle’s management expects Q1 FY24 adjusted EPS to fall within the range of $1.12 to $1.16,
signifying a 9% to 13% year-over-year growth.
Is Oracle Stock Poised for an Uptick?
Oracle is poised to benefit from robust AI-driven demand and its strategic focus on expanding capacity through new cloud regions.
Nonetheless, the stock has experienced a significant surge,
with a year-to-date increase of over 56%, which potentially limits the upside potential in the run-up to Q1 FY24 earnings.
With 13 Buy and 10 Hold recommendations, Oracle stock holds a Moderate Buy consensus rating on TipRanks.
Analysts’ average price target of $131.88 implies a potential upside of 4.4% from current levels.
Options Traders Anticipate a 5.41% Swing in Earnings-Related Movement
Options traders are factoring in a +/- 5.41% movement following ORCL’s earnings announcement,
which exceeds the prior quarter’s earnings-related movement of 0.22% and the average 2.4% movement observed over the last eight quarters.
The anticipated earnings swing is computed by gauging the at-the-money straddle of the options closest to expiration subsequent to the earnings release.
Oracle Q1 Earnings What to Anticipate