Oppenheimer Starts Oracle (ORCL) at Perform, 'Improving Fundamentals Offset by a Less Efficient Cash Model'

Oppenheimer analyst Brian Schwartz initiates coverage on Oracle (NYSE: ORCL) with a Perform rating.

The analyst comments "We launch coverage on Oracle with a Perform rating. We see Oracle as a long-term beneficiary of the software industry secular trends (including digital transformation, generative AI, etc.) driving revenue growth and operating leverage. Additionally, FY2026 guidance implies top-line growth will reaccelerate to a double-digit rate, which in combination with good execution in recent reports, has re-rated ORCL’s multiples to premium valuations in 2024 versus its large cap peers and the market. That said, the Capex pace needed to dislodge and surpass the larger hyperscalers may require a heightened level of spending resulting in a less cash-efficient model for Oracle, and challenge the Street's bullish expectation which assumes flat Capex spending growth in FY2026, and reflected in the current 32x 2025E FCF multiple."

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 $120.62 yesterday.

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