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Oracle Corporation
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== Comparable Company Analysis == Our second method for valuing Oracle was comparable company analysis. Price/earnings, Enterprise Value/EBITDA, and Enterprise Value/Revenue ratios were used. The companies selected were the direct competitors, as mentioned above. [[File:Screenshot 2023-08-23 3.jpg|thumb|994x994px|Comparables table|left]] To begin, the EV/Sales metric was employed. This involved taking the revenue from the past year and multiplying it by the median EV/Sales ratio of competing firms. As a result, the estimated enterprise value stood at $278,895 million. After accounting for net debt, it became evident that the equity value equated to $193,752 million or $71.38 per share. Consequently, based on this ratio, the company appears to be overvalued compared to its peers. Moving on, the EV/EBITDA ratio was employed. By taking the EBITDA over the last 12 months and multiplying it by the median EV/EBITDA ratio among rivals, the implied enterprise value reached $474,443 million. Deducting net debt led us to an equity value of $389,300 million. Dividing this amount by the outstanding shares yielded an implied value of $143.43 per share. Thus, according to this multiple, the company seems to be undervalued compared to its industry counterparts. Lastly, the P/E ratio was brought into consideration. Earnings from the past year were multiplied by the median P/E ratio of the six comparable companies. The estimated equity value stood at $412,878 million. Dividing this sum by the total outstanding shares of 2,714 million resulted in a fair share value of $152.11. Once again, the company's valuation appears to be lower when compared to its peers. These outcomes suggest that investors might not be fully acknowledging the company's potential for earnings or growth relative to its competitors, leading to a lower valuation at present.
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