ORACLE CORP (ORCL) Stock Analysis
ORACLE CORP (ORCL) Stock Analysis
Analysis from 10-Q filed 2025-12-11. Data as of Q1 2026.
Overall Grade: F (Concerning)
ORACLE CORP faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 13.0% | Solid returns |
| FCF Margin | -38.6% | Cash flow pressure |
| Debt/Equity | 3.2x | Elevated debt |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
Explore ORACLE CORP: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: ORACLE CORP earns 13.0% ROIC, Top 50% in Technology
ORACLE CORP's trailing-twelve-month ROIC of 13.0% ranks Top 50% in Technology companies (sector median: 5.2%), driven by NOPAT margin of 27.0% combined with asset turnover of 0.3x. Source: 10-Q filed 2025-12-11.
| Metric | ORCL | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 13.0% | Good | Above sector median of 5.2% |
| Return on Equity (ROE) | 63.5% | Excellent | Efficient use of shareholder equity |
| Operating Margin | 30.6% | Excellent | Efficient operations |
Cash Flow: ORACLE CORP generates $-24.7B FCF at -38.6% margin, positive NaN/8 quarters
ORACLE CORP generated $-24.7B in free cash flow (TTM), a -38.6% FCF margin. Operating cash flow exceeds net income by 1.5x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-12-11.
| Metric | ORCL | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | -38.6% | Red flag | Thin cash margins |
| Free Cash Flow (TTM) | $-24.7B | Red flag | Cash burn |
| OCF/Net Income | 1.5x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: ORACLE CORP at 3.2x leverage
ORACLE CORP's debt-to-equity ratio of 3.2x reflects high leverage. Total debt of $124.7B offset by $39.1B in cash. Source: 10-Q filed 2025-12-11.
| Metric | ORCL | Rating | Context |
|---|---|---|---|
| Debt to Equity | 3.2x | Red flag | Elevated leverage |
| Net Cash Position | $-85.6B | Warning | Net debt position |
Valuation: ORACLE CORP trades at 25.6x earnings
ORACLE CORP trades at a P/E of 25.6x. Free cash flow yield of -6.0% reflects market expectations for growth.
| Metric | ORCL | Rating | Context |
|---|---|---|---|
| P/E Ratio | 25.6x | Adequate | Premium valuation |
| EV/Sales | 7.7x | Adequate | Growth premium priced in |
| FCF Yield | -6.0% | Warning | Lower cash yield |
| Dividend Yield | 1.4% | Adequate | Growth focus over income |
Capital Allocation: ORACLE CORP returns 1.4% shareholder yield
ORACLE CORP's total shareholder yield is 1.4% (dividends 1.4% + buybacks 0.1%). Source: 10-Q filed 2025-12-11.
| Metric | ORCL | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 1.4% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 0.1% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $5.9B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 13.0% | Top 50% | 2.5x above |
| Free Cash Flow Margin | -38.6% | Bottom 10% | -4.3x below |
| Operating Margin | 30.6% | Top 10% | 6.3x above |
| Return on Equity (ROE) | 63.5% | Top 5% | 13.0x above |
| P/E Ratio | 25.6x | N/A | - |
Financial Scorecard
| Metric | ORCL | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 13.0% | Good | Top 50% of sector (median: 5.2%) |
| Free Cash Flow Margin | -38.6% | Red flag | Thin cash margins |
| Debt to Equity Ratio | 324.0% | Red flag | High financial leverage |
| P/E Ratio (Price-to-Earnings) | 25.6x | Adequate | Growth premium |
| Free Cash Flow Yield | -6.0% | Red flag | Growth-focused valuation |
Frequently Asked Questions
Q: What is ORACLE CORP's Return on Invested Capital (ROIC)?
ORACLE CORP (ORCL) has a trailing twelve-month Return on Invested Capital (ROIC) of 13.0%. This compares above the sector median of 5.2%. An ROIC between 12-20% indicates solid capital allocation and sustainable competitive position.
Q: What is ORACLE CORP's Free Cash Flow Margin?
ORACLE CORP (ORCL) has a free cash flow margin of -38.6%, generating $-24.7 billion in free cash flow over the trailing twelve months. Negative free cash flow means the company is consuming cash, which may require financing.
Q: Is ORACLE CORP stock overvalued or undervalued?
ORACLE CORP (ORCL) trades at a P/E ratio of 25.6x, which is above the sector median of N/A. The EV/Sales multiple is 7.7x.
Q: Does ORACLE CORP pay a dividend?
ORACLE CORP (ORCL) currently pays a dividend yield of 1.4%. Including share buybacks, the total shareholder yield is 1.4%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: How much debt does ORACLE CORP have?
ORACLE CORP (ORCL) has a debt-to-equity ratio of 3.2x with total debt of $124.7 billion. Net debt position is $85.6 billion.
Q: What is ORACLE CORP's revenue and earnings growth?
ORACLE CORP (ORCL) grew revenue by 14.9% year-over-year. Earnings per share increased by 30.8% compared to the prior year. Solid growth above 10% suggests healthy business momentum.
Q: Is ORACLE CORP buying back stock?
ORACLE CORP (ORCL) repurchased $245.0 million of stock over the trailing twelve months. This represents a buyback yield of 0.1%.
Q: How does ORACLE CORP compare to competitors in Technology?
Compared to other companies in Technology, ORACLE CORP (ORCL) shows: ROIC of 13.0% is above the sector median of 5.2% (Top 29%). FCF margin of -38.6% trails the sector median of 9.1%. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with ORACLE CORP?
Investors in ORACLE CORP (ORCL) should monitor these potential warning signs: 1) FCF margin is thin at -38.6%, leaving limited buffer for economic downturns. 2) ROIC has been declining, potentially signaling deteriorating competitive position. 3) Debt-to-equity of 3.2x is elevated. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-12-11. TTM metrics as of Q1 2026.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.