Oracle Stock Shares Rally 19% In A Month, Wait For A Dip To Buy The Stock

We believe there is not much to fear in ORCL stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive. Here is our multi-factor assessment.

ORCL stock has jumped meaningfully recently and we currently find it relatively expensive. While this may feel like an opportunity, there is significant risk in relying on a single stock. On the other hand, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Trefis works with Empirical Asset Management – a Boston area wealth manager – whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Let’s get into details of each of the assessed factors but before that, for quick background: With $814 Bil in market cap, Oracle provides cloud software applications, industry-specific solutions, application licenses, license support services, enterprise databases, software development tools, and middleware.

[1] Valuation Looks Very High

This table highlights how ORCL is valued vs broader market. For more details see: ORCL Valuation Ratios

[2] Growth Is Strong

• Oracle has seen its top line grow at an average rate of 10.2% over the last 3 years
• Its revenues have grown 9.7% from $54 Bil to $59 Bil in the last 12 months
• Also, its quarterly revenues grew 12.2% to $15 Bil in the most recent quarter from $13 Bil a year ago.

This table highlights how ORCL is growing vs broader market. For more details see: ORCL Revenue Comparison

[3] Profitability Appears Very Strong

• ORCL last 12 month operating income was $19 Bil representing operating margin of 31.6%
• With cash flow margin of 36.5%, it generated nearly $22 Bil in operating cash flow over this period
• For the same period, ORCL generated nearly $12 Bil in net income, suggesting net margin of about 21.1%

This table highlights how ORCL profitability vs broader market. For more details see: ORCL Operating Income Comparison

[4] Financial Stability Looks Strong

• ORCL Debt was $105 Bil at the end of the most recent quarter, while its current Market Cap is $814 Bil. This implies Debt-to-Equity Ratio of 12.9%
• ORCL Cash (including cash equivalents) makes up $11 Bil of $180 Bil in total Assets. This yields a Cash-to-Assets Ratio of 6.1%

[4] Downturn Resilience Is Strong

ORCL has been more resilient than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• ORCL stock fell 41.1% from a high of $103.65 on 15 December 2021 to $61.07 on 30 September 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 25 May 2023
• Since then, the stock increased to a high of $328.33 on 10 September 2025 , and currently trades at $288.13

2020 Covid Pandemic

• ORCL stock fell 28.6% from a high of $55.73 on 12 February 2020 to $39.80 on 12 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 2 July 2020

2008 Global Financial Crisis

• ORCL stock fell 41.1% from a high of $23.52 on 8 August 2008 to $13.85 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 18 December 2009

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.