Editing Oracle Corporation
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== Investment Thesis == | == Investment Thesis == | ||
We suggest adopting a long position on this stock, positioning it as an appealing option for buying due to its consistent and expanding dividend, steady growth in revenue, and the anticipated substantial growth in the cloud infrastructure sector. There are several positive aspects within the business and financial realms that we expect to yield favorable results, aspects that the investor community currently undervalues. Oracle's Cloud Infrastructure (OCI) is predicted to outperform its competitors due to its superior performance and more affordable pricing. The company is also actively reinvesting significant capital into its operations, as evidenced by its noteworthy capital expenditures and escalating research and development costs. This could effectively support its strategic acquisition approach and product range expansion. Our projected price target, based on the DCF model's base case, stands at $131.43. Furthermore, additional potential for growth is indicated by a comparable company analysis, which demonstrates that the company is currently underestimated by investors relative to its peers, particularly when considering EV/EBITDA and P/E ratios<ref | We suggest adopting a long position on this stock, positioning it as an appealing option for buying due to its consistent and expanding dividend, steady growth in revenue, and the anticipated substantial growth in the cloud infrastructure sector. There are several positive aspects within the business and financial realms that we expect to yield favorable results, aspects that the investor community currently undervalues. Oracle's Cloud Infrastructure (OCI) is predicted to outperform its competitors due to its superior performance and more affordable pricing. The company is also actively reinvesting significant capital into its operations, as evidenced by its noteworthy capital expenditures and escalating research and development costs. This could effectively support its strategic acquisition approach and product range expansion. Our projected price target, based on the DCF model's base case, stands at $131.43. Furthermore, additional potential for growth is indicated by a comparable company analysis, which demonstrates that the company is currently underestimated by investors relative to its peers, particularly when considering EV/EBITDA and P/E ratios<ref>John Soursos. (2023). Applied Project (MSc in Financial Technology, Imperial College Business School).</ref>. | ||
== Business Analysis == | == Business Analysis == | ||
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The global landscape of cloud computing is characterized by its fragmentation, leading to a landscape of intense rivalry. Established entities like Amazon, Microsoft, SAP, IBM, and Salesforce engage in fierce competition, alongside emerging startups that strive to innovate and secure their share of the market. Consequently, Oracle finds itself in the midst of rigorous competition from both established industry players and freshly established firms. Given Oracle's assertive approach to acquisitions and its pursuit of expansion into novel domains like healthcare software (as evident in its acquisition of Cerner, a healthcare software provider), the range of its competitors is poised to expand further. This includes a broader spectrum of rivals such as Epic Systems Corporation, Allscripts Healthcare Solutions, Inc., Arcadia Solutions, athenahealth, Inc., and InterSystems Corporation, among others. Below is a detailed analysis of the most important competitors of Oracle Corporation | The global landscape of cloud computing is characterized by its fragmentation, leading to a landscape of intense rivalry. Established entities like Amazon, Microsoft, SAP, IBM, and Salesforce engage in fierce competition, alongside emerging startups that strive to innovate and secure their share of the market. Consequently, Oracle finds itself in the midst of rigorous competition from both established industry players and freshly established firms. Given Oracle's assertive approach to acquisitions and its pursuit of expansion into novel domains like healthcare software (as evident in its acquisition of Cerner, a healthcare software provider), the range of its competitors is poised to expand further. This includes a broader spectrum of rivals such as Epic Systems Corporation, Allscripts Healthcare Solutions, Inc., Arcadia Solutions, athenahealth, Inc., and InterSystems Corporation, among others. Below is a detailed analysis of the most important competitors of Oracle Corporation: | ||
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|Amazon | |Amazon | ||
|Amazon's subsidiary, AWS, stands as the foremost global provider of cloud services, presenting an extensive range of cloud computing solutions. | |Amazon's subsidiary, AWS, stands as the foremost global provider of cloud services, presenting an extensive range of cloud computing solutions. | ||
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|$1,450,366 mil. | |$1,450,366 mil. | ||
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|Microsoft | |Microsoft | ||
|A worldwide technology giant, Microsoft offers a diverse range of products and services. While Oracle and Microsoft vie in certain domains, their main areas of emphasis diverge. Microsoft holds a significant role in operating systems, cloud solutions, productivity applications (Office Suite), gaming (Xbox), and collaboration tools (Microsoft Teams). | |A worldwide technology giant, Microsoft offers a diverse range of products and services. While Oracle and Microsoft vie in certain domains, their main areas of emphasis diverge. Microsoft holds a significant role in operating systems, cloud solutions, productivity applications (Office Suite), gaming (Xbox), and collaboration tools (Microsoft Teams). | ||
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|$2,407,540 mil. | |$2,407,540 mil. | ||
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|IBM | |IBM | ||
|IBM is a technology and advisory firm with a well-established history in multiple industries, encompassing fields like cloud offerings, artificial intelligence, and enterprise solutions. | |IBM is a technology and advisory firm with a well-established history in multiple industries, encompassing fields like cloud offerings, artificial intelligence, and enterprise solutions. | ||
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|$129,280 mil. | |$129,280 mil. | ||
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|Salesforce | |Salesforce | ||
|Salesforce holds a prominent position in the customer relationship management (CRM) industry. It delivers cloud-centric solutions for overseeing sales, marketing, and customer service operations. | |Salesforce holds a prominent position in the customer relationship management (CRM) industry. It delivers cloud-centric solutions for overseeing sales, marketing, and customer service operations. | ||
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|$206,546 mil. | |$206,546 mil. | ||
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|SAP | |SAP | ||
|SAP is a leading enterprise software company known for its Enterprise Resource Planning (ERP) systems and other business applications. Its expertise lies in aiding companies in the management of diverse operations, encompassing finance, supply chain, and human resources. | |SAP is a leading enterprise software company known for its Enterprise Resource Planning (ERP) systems and other business applications. Its expertise lies in aiding companies in the management of diverse operations, encompassing finance, supply chain, and human resources. | ||
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|$162,318 mil. | |$162,318 mil. | ||
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|Workday | |Workday | ||
|Workday is a company that offers enterprise software through cloud-based services, focusing on delivering solutions for managing human capital (HCM) and financial management tailored to businesses and organizations. | |Workday is a company that offers enterprise software through cloud-based services, focusing on delivering solutions for managing human capital (HCM) and financial management tailored to businesses and organizations. | ||
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|$59,401 mil. | |$59,401 mil. | ||
|} | |} |