Oracle Rallies After Dividend Hike

Key Insights

• Oracle released its fiscal fourth-quarter results, easily beating analyst estimates on both earnings and revenue. 
• The company increased its quarterly dividend by 19%, which served as an additional bullish catalyst for the stock. 
• Oracle is trading at 12 forward P/E which looks rather cheap, but the stock’s near-term dynamics will depend on general market sentiment towards tech stocks. 

Oracle Gains Ground After Strong Report

Shares of Oracle  gained strong upside momentum after the company released its quarterly report. Oracle reported revenue of $11.84 billion and adjusted earnings of $1.54 per share, easily beating analyst estimates on both earnings and revenue.

The company noted that it had experienced a significant increase in demand in its infrastructure business. Oracle believes that this increase indicates that this business has entered a hyper-growth phase.

Oracle decided to increase the quarterly dividend from $0.27 per share to $0.32 per share, which served as an additional bullish catalyst for the stock. At current price levels, Oracle yields 1.8%.

What’s Next For Oracle Stock?

Analysts expect that Oracle will report earnings of $5.25 per share in the current year and $5.76 per share in the next year, so the stock is trading at 12 forward P/E. Analyst estimates have been mostly stable in recent months, while the stock has been under significant pressure since the start of this year.

While Oracle stock looks cheap at current levels, its near-term dynamics will depend on general market sentiment towards tech stocks. Traders are worried that the Fed will raise rates aggressively to fight inflation, which is bearish for tech companies.

It remains to be seen whether the company’s internal catalysts, like the strength of its infrastructure business, will be sufficient enough to provide support for the stock in case the general market moves towards new lows.

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