Orclae (ORCL) Undervalued Heading into CloudWorld - Piper Jaffray

Piper Jaffray analyst, Katherine Egbert, believes that Oracle (NYSE: ORCL) is in a show me state where investors need to see acceleration in cloud revenue, and stabilization in the non-cloud businesses, to assign a market multiple to the shares and next week's CloudWorld could be the catalyst to improve sentiment.

In a show of how important the cloud offerings (currently only ~8% of revenue) are to Oracle, CEO Mark Hurd and EVP Thomas Kurian are scheduled to attend and, presumably, speak at the event. They will also be meeting privately with investors and analysts.

ORCL is trading at 10.1x 2016 cash flow, and 10.8x 2016 free cash flow, below the historical 15-year 12x and 12.5x respective averages for the enterprise software goup. The company's 2016 PE of 12.8x is also below the historical average of nearly 20x as is EV/EBITDA of 7.4x.

No change to Overweight rating and $46 price target.

CloudWorld will be held next week on January 20, in New York City.

For an analyst ratings summary and ratings history on Oracle click here. For more ratings news on Oracle click here.

Shares of Oracle closed at $34.08 yesterday.

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