Oracle Stock Tumbled 22% – Opportunity or Trap?
Oracle (ORCL) stock has fallen by 21.8% in less than a month, from $204.68 on 12th Jan, 2026 to $160.06 now. Should you buy this dip?
Dip buying is a viable strategy for quality stocks that have a history of recovering from dips. As it turns out, ORCL stock passes basic quality checks There is only one past instance where it dipped sharply, and returned -17% during the subsequent 12-month period, with peak return reaching 12%. We define sharp dip as stock going down 30% or more, in less than 30 day period.
Below, we get into details of historical dips and subsequent returns.
Historical Median Returns Post Dips
| Period | Past Median Return |
|---|---|
| 1M | -0.4% |
| 3M | -17.0% |
| 6M | -17.0% |
| 12M | -17.0% |
Historical Dip-Wise Details
ORCL had 1 events since 1/1/2010 where the dip threshold of -30% within 30 days was triggered
- 12% median peak return within 1 year of dip event
- 19 days is the median time to peak return after a dip event
- -17% median max drawdown within 1 year of dip event
| 30 Day Dip | ORCL Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | ORCL | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | -17% | 12% | -17% | 19 | ||||
| 11212025 | -32% | 1% | -17% | 12% | -17% | 19 | ||
Oracle Passes Basic Financial Quality Checks
Revenue growth, profitability, cash flow, and balance sheet strength need to be evaluated to reduce the risk of a dip being the sign of a deteriorating business situation.
| Quality Metrics | Value | Quality Check |
|---|---|---|
| Revenue Growth (LTM) | 11.1% | Pass |
| Revenue Growth (3-Yr Avg) | 9.8% | Pass |
| Operating Cash Flow Margin (LTM) | 36.5% | Pass |
| Leverage (see below) | – | Pass |
| => Interest Coverage Ratio | 5.5 | |
| => Cash To Interest Expense Ratio | 5.1 |
Not sure if you can take a call on ORCL stock? Consider portfolio approach
Smart Investing Begins With Portfolios
Stocks soar and sink – the key is staying invested. A balanced portfolio keeps you in the market, boosts gains and reduces single stock risk
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 – the S&P 500, S&P mid-cap, and Russell 2000 indices. 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.