When you hear the name Oracle, what comes to mind?
Chances are, you're thinking of old-school databases, big enterprise contracts, or maybe Larry Ellison’s yacht. And you're not wrong — Oracle has been a software giant for decades. But behind the legacy, there’s a transformation underway that’s catching serious investor attention:
Oracle is becoming one of the most quietly powerful cloud infrastructure players in the AI boom.
So the real question smart investors should be asking right now isn’t:
“Is Oracle still relevant?”
It’s this:
“Is Oracle still a smart investment at this price?”
As a value investor who combines deep fundamental analysis with AI-powered tools, I’m going to walk you through a comprehensive breakdown of Oracle from a true value lens — one that cuts through the noise and gets to the numbers that actually matter.
Whether you're learning how to value a stock or looking for your next long-term compounder, this guide will change how you see companies like ORCL.
Let’s dive in.
🧩 First: What Even Is Oracle?
To understand whether Oracle is a good buy, you first need to understand what it actually does — and how it’s reinventing itself in the AI era.
👇 TL;DR – Oracle in 3 Sentences:
💲It builds the databases that power much of the world’s enterprise software and runs mission-critical infrastructure for governments and companies.
💲It’s pivoting fast into cloud computing — and now claims cloud growth of over 70%, driven by demand from AI startups and enterprises alike.
💲With nearly 80% of its revenue coming from recurring cloud services, Oracle is quickly becoming an AI-first infrastructure provider.
Oracle isn’t just the old guard anymore — it’s quietly competing with AWS and Azure for the future of cloud.
🧠 Understanding Value: What Makes a Stock Undervalued or Overvalued?
Before we talk stock prices, let’s clarify something:
Value investing isn’t about buying cheap stocks.
It’s about buying great businesses for less than they’re worth.
To determine whether Oracle is undervalued or not, I ran it through six institutional-grade valuation models — then created a weighted average fair value to account for both opportunity and risk.
These models include:
✅ Discounted Cash Flow (DCF)
✅ Price-to-Earnings Multiples
✅ PEG Ratios
✅ Graham Formula
✅ Dividend Discount Model
✅ Forward Earnings Forecasts
Let’s walk through them — simply and clearly.
💵 Market Snapshot (as of June 14, 2025)
🔹 Current Stock Price: $215.22 (All-time high)
🔹 Consensus Analyst Target: ~$230–240 (some stretch targets at $275)
🔹 My Fair Value Estimate (weighted model): $217.50
🔹 Upside Potential: ~1% base case, with a bull case of ~28%, bear case of -5-10%.
📊 Let’s Break Down the Valuation Models — One by One
1️⃣ Discounted Cash Flow (DCF)
This model asks:
“How much cash will Oracle generate in the future — and what is that worth today?”
Assumptions:
- Revenue grows at ~11% CAGR
- 10% discount rate
- Terminal growth at 2%
Fair Value from DCF: $235.00
2️⃣ P/E Multiples (Price-to-Earnings)
We look at how much investors are paying per dollar of earnings — adjusted for Oracle’s industry average.
Fair Value from P/E: $220.00
(Oracle trades near 19× earnings vs. industry ~20×)
3️⃣ Forward P/E Valuation
Forward P/E accounts for future earnings projections — critical for growth pivots like Oracle’s cloud expansion.
Fair Value from Forward P/E: $240.00
4️⃣ Graham Formula
Ben Graham’s method values a company based on conservative earnings and growth expectations.
Fair Value from Graham Formula: $200.00
5️⃣ PEG Ratio (Price/Earnings/Growth)
A PEG near 1.0 means the price matches growth. Oracle’s growth-adjusted valuation looks compelling.
Fair Value Estimate from PEG: $250.00
6️⃣ Dividend Discount Model (DDM)
Oracle pays a dividend, but it’s modest. This model gives a lower valuation since most profits are reinvested.
Fair Value from DDM: $180.00
📊 Final Verdict: Weighted Average Fair Value = $217.50
At a current price of $215.22, Oracle is fairly valued — with more upside if growth exceeds expectations. BUT, I'd 100% wait for a pull-back.
⚖️ How I Weighed the Models (And Why It Matters)
Some valuation models work better for mature dividend payers. Others capture future growth. For Oracle — which straddles both — we need a balanced lens.
Here’s how I weighed the models:
🔹 Discounted Cash Flow (25%)
Oracle’s predictable cash flows and stable margin profile make DCF highly reliable.
🔹 Price-to-Earnings (20%)
Solid earnings and long-term contracts make the P/E model effective here.
🔹 Forward P/E (15%)
We factor in strong earnings guidance and cloud growth momentum.
🔹 Graham Formula (15%)
Good for conservatively modeling a legacy-heavy but evolving business.
🔹 PEG Ratio (15%)
Captures Oracle’s accelerating cloud growth and valuation premium.
🔹 Dividend Discount Model (10%)
Minor weighting — the dividend is nice but not central to the investment thesis.
Result: A composite valuation of $217.50 — right around current prices, but with a stretch case closer to $275.
📚 Book Value Growth: Quiet Compounding in Action
Oracle’s Book Value Per Share (BVPS) is often overlooked — but it's telling a quiet growth story.
Here’s how it’s evolved:
🔹 2020: ~$52
🔹 2024: ~$80
🔹 5-Year CAGR: ~11%
If this trend holds, BVPS could reach $142 by 2029.
At the current P/B ratio of 2.7×, that implies a future price target of ~$384 — long-term investors, take note.
This isn’t just noise. It’s what compounding looks like beneath the surface.
🔍 The Metrics That Matter
Here’s what’s driving my conviction:
🔹 P/E Ratio ~19× — Slightly below industry average. Not overvalued.
🔹 Forward P/E ~18× — Sign of efficient earnings growth.
🔹 ROE ~25% — A solid return on shareholder equity.
🔹 Debt/Equity ~1.2× — Manageable leverage, not excessive.
🔹 PEG Ratio ~1.3× — Growth-adjusted value looks reasonable.
🔹 Free Cash Flow: $20.8B — Plenty of ammo for buybacks, dividends, or reinvestment.
🔹 Cloud Revenue Growth: Expected to surge 40–70% next year.
This isn’t a sleepy old tech company anymore. Oracle is moving — fast.
📰 What’s Happening Right Now?
🔹 Q4 FY2025 Beat: $15.9B revenue (+11%), EPS beat
🔹 FY2026 Outlook: $67B revenue target, cloud growth >70%
🔹 Stock Surge: +29% YTD; +14.5% in a single day — best in 3 years
🔹 Record RPO: $138B — 41% YoY growth, signaling backlog strength
🔹 Some Analysts Cautious: Concerned about margin pressure and stretched valuations
Oracle is executing. But it's also priced for near-perfection — which means entry timing matters.
📈 Technicals: What Do the Charts Say?
Even fundamental investors should watch the chart.
🔹 Pattern: Inverse head & shoulders breakout
🔹 RSI: Overbought (~85) — signals short-term overheating
🔹 Support Levels: $180 and $154 — key zones to buy on dips
🔹 Next Resistance: ~$275 — stretch target on breakout continuation
🔹 Momentum: Strong buy signals from moving averages
📌 Recommendation: Wait for pullbacks between $180–200 for best risk/reward.
🧠 Bottom Line: Should You Buy Oracle?
Let’s be real:
Oracle isn’t flashy — but it’s doing something very rare:
✅ Accelerating growth in a legacy business
✅ Winning cloud infrastructure deals in the AI race
✅ Generating enormous cash flow
✅ Reasonably priced vs. peers
If you want exposure to AI infrastructure without the megacap premiums of NVIDIA or Microsoft — Oracle might be the play. It’s not undervalued by much, but pullbacks offer a great long-term entry. Disclaimer: this is for informational purposes only. Do your own due diligence.
🚀 Want To Analyze Stocks Like This Without Doing All the Math?
I built Wallstreet Alchemist AI to help investors cut through hype and analyze real value — using the same models I use professionally.
🎯 Try it for free (LINK IN PROFILE) — and let AI do the math, so you can focus on conviction.
Chances are, you're thinking of old-school databases, big enterprise contracts, or maybe Larry Ellison’s yacht. And you're not wrong — Oracle has been a software giant for decades. But behind the legacy, there’s a transformation underway that’s catching serious investor attention:
Oracle is becoming one of the most quietly powerful cloud infrastructure players in the AI boom.
So the real question smart investors should be asking right now isn’t:
“Is Oracle still relevant?”
It’s this:
“Is Oracle still a smart investment at this price?”
As a value investor who combines deep fundamental analysis with AI-powered tools, I’m going to walk you through a comprehensive breakdown of Oracle from a true value lens — one that cuts through the noise and gets to the numbers that actually matter.
Whether you're learning how to value a stock or looking for your next long-term compounder, this guide will change how you see companies like ORCL.
Let’s dive in.
🧩 First: What Even Is Oracle?
To understand whether Oracle is a good buy, you first need to understand what it actually does — and how it’s reinventing itself in the AI era.
👇 TL;DR – Oracle in 3 Sentences:
💲It builds the databases that power much of the world’s enterprise software and runs mission-critical infrastructure for governments and companies.
💲It’s pivoting fast into cloud computing — and now claims cloud growth of over 70%, driven by demand from AI startups and enterprises alike.
💲With nearly 80% of its revenue coming from recurring cloud services, Oracle is quickly becoming an AI-first infrastructure provider.
Oracle isn’t just the old guard anymore — it’s quietly competing with AWS and Azure for the future of cloud.
🧠 Understanding Value: What Makes a Stock Undervalued or Overvalued?
Before we talk stock prices, let’s clarify something:
Value investing isn’t about buying cheap stocks.
It’s about buying great businesses for less than they’re worth.
To determine whether Oracle is undervalued or not, I ran it through six institutional-grade valuation models — then created a weighted average fair value to account for both opportunity and risk.
These models include:
✅ Discounted Cash Flow (DCF)
✅ Price-to-Earnings Multiples
✅ PEG Ratios
✅ Graham Formula
✅ Dividend Discount Model
✅ Forward Earnings Forecasts
Let’s walk through them — simply and clearly.
💵 Market Snapshot (as of June 14, 2025)
🔹 Current Stock Price: $215.22 (All-time high)
🔹 Consensus Analyst Target: ~$230–240 (some stretch targets at $275)
🔹 My Fair Value Estimate (weighted model): $217.50
🔹 Upside Potential: ~1% base case, with a bull case of ~28%, bear case of -5-10%.
📊 Let’s Break Down the Valuation Models — One by One
1️⃣ Discounted Cash Flow (DCF)
This model asks:
“How much cash will Oracle generate in the future — and what is that worth today?”
Assumptions:
- Revenue grows at ~11% CAGR
- 10% discount rate
- Terminal growth at 2%
Fair Value from DCF: $235.00
2️⃣ P/E Multiples (Price-to-Earnings)
We look at how much investors are paying per dollar of earnings — adjusted for Oracle’s industry average.
Fair Value from P/E: $220.00
(Oracle trades near 19× earnings vs. industry ~20×)
3️⃣ Forward P/E Valuation
Forward P/E accounts for future earnings projections — critical for growth pivots like Oracle’s cloud expansion.
Fair Value from Forward P/E: $240.00
4️⃣ Graham Formula
Ben Graham’s method values a company based on conservative earnings and growth expectations.
Fair Value from Graham Formula: $200.00
5️⃣ PEG Ratio (Price/Earnings/Growth)
A PEG near 1.0 means the price matches growth. Oracle’s growth-adjusted valuation looks compelling.
Fair Value Estimate from PEG: $250.00
6️⃣ Dividend Discount Model (DDM)
Oracle pays a dividend, but it’s modest. This model gives a lower valuation since most profits are reinvested.
Fair Value from DDM: $180.00
📊 Final Verdict: Weighted Average Fair Value = $217.50
At a current price of $215.22, Oracle is fairly valued — with more upside if growth exceeds expectations. BUT, I'd 100% wait for a pull-back.
⚖️ How I Weighed the Models (And Why It Matters)
Some valuation models work better for mature dividend payers. Others capture future growth. For Oracle — which straddles both — we need a balanced lens.
Here’s how I weighed the models:
🔹 Discounted Cash Flow (25%)
Oracle’s predictable cash flows and stable margin profile make DCF highly reliable.
🔹 Price-to-Earnings (20%)
Solid earnings and long-term contracts make the P/E model effective here.
🔹 Forward P/E (15%)
We factor in strong earnings guidance and cloud growth momentum.
🔹 Graham Formula (15%)
Good for conservatively modeling a legacy-heavy but evolving business.
🔹 PEG Ratio (15%)
Captures Oracle’s accelerating cloud growth and valuation premium.
🔹 Dividend Discount Model (10%)
Minor weighting — the dividend is nice but not central to the investment thesis.
Result: A composite valuation of $217.50 — right around current prices, but with a stretch case closer to $275.
📚 Book Value Growth: Quiet Compounding in Action
Oracle’s Book Value Per Share (BVPS) is often overlooked — but it's telling a quiet growth story.
Here’s how it’s evolved:
🔹 2020: ~$52
🔹 2024: ~$80
🔹 5-Year CAGR: ~11%
If this trend holds, BVPS could reach $142 by 2029.
At the current P/B ratio of 2.7×, that implies a future price target of ~$384 — long-term investors, take note.
This isn’t just noise. It’s what compounding looks like beneath the surface.
🔍 The Metrics That Matter
Here’s what’s driving my conviction:
🔹 P/E Ratio ~19× — Slightly below industry average. Not overvalued.
🔹 Forward P/E ~18× — Sign of efficient earnings growth.
🔹 ROE ~25% — A solid return on shareholder equity.
🔹 Debt/Equity ~1.2× — Manageable leverage, not excessive.
🔹 PEG Ratio ~1.3× — Growth-adjusted value looks reasonable.
🔹 Free Cash Flow: $20.8B — Plenty of ammo for buybacks, dividends, or reinvestment.
🔹 Cloud Revenue Growth: Expected to surge 40–70% next year.
This isn’t a sleepy old tech company anymore. Oracle is moving — fast.
📰 What’s Happening Right Now?
🔹 Q4 FY2025 Beat: $15.9B revenue (+11%), EPS beat
🔹 FY2026 Outlook: $67B revenue target, cloud growth >70%
🔹 Stock Surge: +29% YTD; +14.5% in a single day — best in 3 years
🔹 Record RPO: $138B — 41% YoY growth, signaling backlog strength
🔹 Some Analysts Cautious: Concerned about margin pressure and stretched valuations
Oracle is executing. But it's also priced for near-perfection — which means entry timing matters.
📈 Technicals: What Do the Charts Say?
Even fundamental investors should watch the chart.
🔹 Pattern: Inverse head & shoulders breakout
🔹 RSI: Overbought (~85) — signals short-term overheating
🔹 Support Levels: $180 and $154 — key zones to buy on dips
🔹 Next Resistance: ~$275 — stretch target on breakout continuation
🔹 Momentum: Strong buy signals from moving averages
📌 Recommendation: Wait for pullbacks between $180–200 for best risk/reward.
🧠 Bottom Line: Should You Buy Oracle?
Let’s be real:
Oracle isn’t flashy — but it’s doing something very rare:
✅ Accelerating growth in a legacy business
✅ Winning cloud infrastructure deals in the AI race
✅ Generating enormous cash flow
✅ Reasonably priced vs. peers
If you want exposure to AI infrastructure without the megacap premiums of NVIDIA or Microsoft — Oracle might be the play. It’s not undervalued by much, but pullbacks offer a great long-term entry. Disclaimer: this is for informational purposes only. Do your own due diligence.
🚀 Want To Analyze Stocks Like This Without Doing All the Math?
I built Wallstreet Alchemist AI to help investors cut through hype and analyze real value — using the same models I use professionally.
🎯 Try it for free (LINK IN PROFILE) — and let AI do the math, so you can focus on conviction.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.