Oracle (NYSE:ORCL) recently announced its fourth-quarter results, surpassing Wall Street’s expectations. The company reported earnings of $1.70 per share on sales of $15.9 billion, exceeding consensus estimates of $1.64 and $15.6 billion, respectively. This strong performance was largely driven by remarkable growth in its cloud services, especially cloud infrastructure, which surged 52% in Q4 and is projected to increase by an impressive 70% in fiscal year 2026. This trajectory suggests Oracle is well-positioned to exceed its previously stated revenue target of $104 billion for fiscal year 2029. Following these positive results, Oracle’s stock (ORCL) jumped 8% to around $190 in extended trading on Wednesday, June 11, 2025.
While Oracle’s Q4 results were undoubtedly strong, the critical question for investors is whether ORCL stock is a buy at its current price of $190. We believe it is. Despite its high valuation, there’s minimal cause for concern, making it an attractive investment. However, its high valuation also means it could be particularly sensitive to adverse events.
Our conclusion is based on a comprehensive analysis of Oracle’s current valuation compared to its recent operating performance and its present and historical financial condition. Our in-depth assessment across key parameters — Growth, Profitability, Financial Stability, and Downturn Resilience — reveals that Oracle demonstrates a very strong operating performance and financial condition.
How Does Oracle’s Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, ORCL stock looks expensive compared to the broader market.
- Oracle has a price-to-sales (P/S) ratio of 9.5 vs. a figure of 3.0 for the S&P 500
- And, it has a price-to-earnings (P/E) ratio of 43.7 vs. the benchmark’s 26.4
How Have Oracle’s Revenues Grown Over Recent Years?
Oracle’s Revenues have seen notable growth over recent years.
- Oracle has seen its top line grow at an average rate of 10.7% over the last 3 years (vs. an increase of 5.5% for S&P 500)
- Its revenues have grown 8.4% from $53 Bil to $57 Bil in the last 12 months (vs. growth of 5.5% for S&P 500)
- Also, its quarterly revenues grew 11% to $16 Bil in the most recent quarter from $14 Bil a year ago (vs. 4.8% improvement for S&P 500)
How Profitable Is Oracle?
Oracle’s profit margins are much higher than most companies in the Trefis coverage universe.
Does Oracle Look Financially Stable?
Oracle’s balance sheet looks neutral.
- Oracle’s Debt figure was $104 Bil at the end of the most recent quarter, while its market capitalization is $494 Bil (as of 6/11/2025). This implies a moderate Debt-to-Equity Ratio of 21.0% (vs. 19.9% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
- Cash (including cash equivalents) makes up $11 Bil of the $168 Bil in Total Assets for Oracle. This yields a poor Cash-to-Assets Ratio of 6.7% (vs. 13.8% for S&P 500)
How Resilient Is ORCL Stock During A Downturn?
ORCL stock has been more resilient than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on ORCL stock? Our dashboard – How Low Can Oracle Stock Go In A Market Crash? – has a detailed analysis of how the stock performed during and after previous market crashes.
Inflation Shock (2022)
- 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
- The stock fully recovered to its pre-Crisis peak by 25 May 2023
- Since then, the stock has increased to a high of $192.43 on 21 November 2024 and currently trades at around $175
Covid Pandemic (2020)
- 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
- The stock fully recovered to its pre-Crisis peak by 2 July 2020
Global Financial Crisis (2008)
- 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
- The stock fully recovered to its pre-Crisis peak by 18 December 2009
Putting All The Pieces Together: What It Means For ORCL Stock
In summary, Oracle’s performance across the parameters detailed above is as follows:
- Growth: Very Strong
- Profitability: Very Strong
- Financial Stability: Neutral
- Downturn Resilience: Very Strong
- Overall: Very Strong
Oracle has demonstrated very strong performance across key metrics. While its current valuation of 9.5 times trailing revenues is notably higher than the S&P 500’s average of 3 times, this premium appears justified by the company’s ambitious growth trajectory. Oracle is projected to increase its revenues from $57 billion in fiscal 2025 to $104 billion in 2029, representing a compound annual growth rate (CAGR) of over 16%. Although the current 9.5x price-to-sales (P/S) ratio is higher than the company’s three-year average of 6.6x, we believe this increase in valuation is warranted given its strong outlook.
It’s important to acknowledge that we could be mistaken with this optimistic view, and some investors may indeed find the stock expensive at current levels. Furthermore, there are inherent risks, such as a potential slowdown in demand if the broader economy weakens, which could specifically impact pricing. Increased competition from other dominant players also poses a challenge.
While Oracle appears fundamentally sound from an operating and financial perspective, its valuation introduces a degree of investment risk. In fact, investing in a single stock, or even a small number of stocks, always carries significant risk. Consider Trefis High Quality (HQ) Portfolio, which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. 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.
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