Debt burden is moderate, so it can be affected by the economic cycle.
Metrics · D/E ~187% · Current Ratio 1.17
💲Is the price expensive now?
Not cheap (fair to slightly pricey)
Because it is a good, popular company, those expectations are already priced in.
Metrics · P/E 24.0 · P/B 6.6
💡#1 database pivoting to AI infra: Q1 revenue +30%, OCI +121%, backlog $664B. But $28.5B of capex left FCF negative and equity came from a $20B share sale.
Compiled from public financial data. Not a recommendation to buy or sell any security. · Source: Company FY2027 Q1 results (quarter ended 2026-08-31) - margins, ROE and revenue growth are a TTM built by summing four quarters directly (the data provider's TTM still lags one quarter) - debt/equity is $125.3B of borrowings over $67.2B of equity, excluding $31.4B of operating lease liabilities - P/E and P/B on the 2026-09-10 close, as of 2026-09-10
Business Summary · Key Value Metrics
Decades-long #1 in enterprise databases, now pivoting toward cloud and AI infrastructure via OCI (Oracle Cloud Infrastructure) and GPU clusters for AI workloads. FY2027 Q1 revenue rose 30% with OCI up 121%, and remaining performance obligations reached $664B. TTM revenue $71.8B, 32.1% operating margin.
Current Price
$152.94
-5.38%-$8.69· Close 2026-09-10
Analyst Consensus Target (external reference)
$251.85
Avg. of 43 external analysts · stockanalysis (43-analyst consensus, Buy)
P/E (TTM)
24.0x
TTM - on the 2026-09-10 close
Operating Margin
32.1%
TTM - up from 30.6% in FY2026
Net Margin
26.4%
TTM
ROE
34.3%
TTM avg equity - $20B raise lifted it
Revenue Growth
+21.7%
TTM YoY - +30% in the latest quarter
Market Cap
$440.5B
as of 2026-09-10
Economic Moat · Key Business Segments
Oracle has been the multi-decade leader in mission-critical enterprise databases, creating a lock-in where switching costs for core systems in finance, government, and healthcare are extremely high. It is now expanding into cloud and AI infrastructure through OCI (Oracle Cloud Infrastructure) and GPU clusters for AI workloads, with multi-cloud partnerships across Azure, AWS, and Google. TTM operating margin 32.1% (source: company IR, SEC 10-K).
Database Lock-in
#1 in enterprise databases, with extremely high switching costs for mission-critical systems.
OCI / AI Infrastructure
AI cloud built on GPU clusters. Q1 OCI +121%, backlog $664B (+$209B YoY).
Multi-cloud
Partnerships with Azure, AWS, and Google broaden accessibility.
High-Margin Software
Software leverage drives a 32.1% TTM operating margin.
10-Year Financial Trends
Oracle grew slowly for years (nine-year revenue CAGR +6.7%) before accelerating to +17% in FY2026 and +30% in FY2027 Q1. The quarter ended August 31 2026 delivered revenue of $19.3B, cloud of $11.6B (+62%) and OCI of $7.4B (+121%), with GAAP operating income of $6.73B (+57%). It booked over $30B of new AI cloud contracts, lifting backlog to $664B (+$209B YoY), about half of which should convert within 36 months. But capex of $28.5B outran operating cash flow of $23.1B, leaving free cash flow at -$5.4B, and equity was topped up by selling $20B of stock (Source: company FY2027 Q1 results).
10-Year Growth
Revenue$67.4B · CAGR +6.2%
Operating Income$20.6B · CAGR +5.0%
EPS$5.83 · CAGR +10.9%
10-Year Valuation
P/E (year-end)38.7x · avg 30.9x
ROA8.4% · avg 9.3%
Operating Margin30.6% · avg 32.0%
📊 Annual Data Table (ORCL) — expand/collapse
Year
Revenue (B$)
Op. Income (B$)
EPS ($)
P/E (x)
ROA (%)
Op. Margin (%)
2016
37
12.6
2.07
—
—
34
2017
37.7
12.7
2.21
—
—
33.7
2018
39.8
13.7
0.9
—
—
34.3
2019
39.5
13.5
2.97
—
—
34.3
2020
39.1
13.9
3.08
—
—
35.6
2021
40.5
15.2
4.55
16.2
—
37.6
2022
42.4
10.9
2.41
28.3
8
25.7
2023
50
13.1
3.07
33.3
10
26.2
2024
53
15.4
3.71
30.9
9.9
29
2025
57.4
17.7
4.34
38.1
10
30.8
2026
67.4
20.6
5.83
38.7
8.4
30.6
— = no data for that year/metric (P/E omitted before EPS turned positive)
9-Year CAGR: Revenue +6.7% · Operating Income +5.5% · Net Income +6.9% · EPS +11.4%
Source: SEC EDGAR 10-K (XBRL), stockanalysis. Fiscal year (May year-end) GAAP; EPS is diluted. FY2018 EPS dropped on a one-time charge from U.S. tax reform (TCJA). From FY2022, an operating-expense reclassification created a step in operating margin from about 37% to the 26% range (an accounting reclassification, not an error). P/E = fiscal year-end price ÷ diluted EPS, last 6 years. A 10-year ROE chart is omitted — Oracle's large buybacks drove equity negative in FY2022 and made it too volatile for a multi-year ROE trend to be meaningful. A $20B share sale in FY2027 Q1 grew equity 56% in a single quarter, adding to that volatility. For current ROE (about 34%, TTM on average equity), see the metrics above and the summary box.
Mega-Cap Value Metric Comparison
Oracle trades at 24.0x TTM earnings, well below NOW (58.5x) and in line with MSFT (22.2x) and SAP (20.9x). Its 32.1% operating margin trails MSFT (46.8%) but beats SAP, CRM and NOW, and TTM revenue growth of +21.7% is near the top of the group. ROE of 34.3% is down from the 50%-plus it showed last quarter - not because earnings weakened, but because a $20B share sale grew equity, the denominator, by 56% in a single quarter (Oracle is on FY2027 Q1; peers are TTM. Source: TradingView, company filings).
Metric
★ ORCL
MSFT
SAP
CRM
NOW
P/E (TTM)
24.0
22.2
20.9
18.3
58.5
Operating Margin
32.1%
46.8%
28.6%
21.9%
14.8%
ROE
34.3%
34.0%
17.2%
16.9%
16.1%
Revenue YoY Growth
+21.7%
+17.9%
+14.8%
+11.0%
+21.7%
Oracle = TTM summed through FY2027 Q1 (ended 2026-08-31) - peers are TTM retrieved 2026-07 - Source: TradingView, company filings.
Key Risk Factors (from 10-K)
●
Borrowings of $125B, with equity raised by selling stock— As of August 31 2026 borrowings stood at $125.3B against $67.2B of equity, a debt/equity ratio of about 1.87x. That is far below the 3.89x of the prior quarter, but not because Oracle paid debt down. It sold $20B of common stock through an at-the-market program during the quarter (net proceeds $19.9B), lifting equity from $43.1B to $67.2B. Borrowings themselves only edged down from $129.5B to $125.3B, and $31.4B of operating lease liabilities sit outside this ratio. S&P cut the credit rating to BBB- in July 2026.Source: Company FY2027 Q1 results (balance sheet, cash flow statement), S&P
●
AI capex now exceeds operating cash flow— FY2027 Q1 capital expenditures of $28.5B ran ahead of the same quarter's $23.1B of operating cash flow (+184%), leaving free cash flow at -$5.4B. Over the trailing twelve months, capex was $55.7B against free cash flow of -$23.7B. The question is whether the backlog converts into revenue and cash fast enough to catch up with the spending, and the money being spent now will land in earnings as depreciation over the next several years.Source: Company FY2027 Q1 results (cash flow statement)
●
Intensifying Cloud Competition— Growing competition from cloud-native databases and infrastructure at AWS, Azure, and Google. Legacy on-premise license revenue is trending down.Source: Company 10-K
●
Growth depends on converting the backlog— Remaining performance obligations reached $664B, up $209B year over year, and management expects roughly half to become revenue within 36 months. Put another way, the current valuation leans on contracts that have not yet turned into revenue. Delays or customer scope reductions would undermine the premise of accelerating growth.Source: Company FY2027 Q1 results
●
Dilution from the share sale— Oracle sold $20B of common stock through an at-the-market program in FY2027 Q1. The thicker equity base flatters leverage ratios, but existing holders are diluted by the same amount and the denominators of per-share measures such as EPS and ROE grow. As long as AI capex continues, further raises are possible.Source: Company FY2027 Q1 results (cash flow statement)
✦ ValueCrab Dashboard PreviewORCL $152.94 -5.38% · as of 2026-09-10
My Portfolio example
Growth
Earnings
Dividend
Cash
Revenue 10Y trend$67.4B · CAGR +6.7%
$67.4B$0.0B
20162026
P/E (TTM)24.0x
Operating Margin32.1%
Net Margin26.4%
ROE34.3%
Revenue Growth+21.7%
Market Cap$440.5B
Revenue CAGR 9Y+6.7%
EPS CAGR 9Y+11.4%
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Value Investing FAQ (ORCL)
Q. What are Oracle's (ORCL) key value-investing metrics?P/E (TTM) 24.0, operating margin 32.1%, net margin 26.4%, ROE 34.3%, TTM revenue growth +21.7% (+30% in the latest quarter), backlog $664B (Source: company FY2027 Q1 results, SEC EDGAR, as of 2026-09-10).
Q. How does Oracle make money?Traditionally it earned money from enterprise database licenses and maintenance; more recently, subscription revenue from the cloud (OCI) and GPU infrastructure for AI is growing fast. It is in a transition, layering cloud growth on top of its database lock-in.
Q. What is the analyst price-target consensus for Oracle?43 analysts have an average price target of $251.85. This is an external consensus, not our own estimate. Against the current price of $152.94 that is +64.7%. Source: stockanalysis, compiled 2026-07.
Q. Is the high debt a risk? Didn't leverage just improve?Debt/equity did fall from about 389% to 187%, but not because debt was repaid. In the quarter ended August 2026 Oracle sold $20B of common stock through an at-the-market program, lifting equity from $43.1B to $67.2B, while borrowings only edged down from $129.5B to $125.3B. On top of that, $31.4B of operating lease liabilities are not in the ratio. Free cash flow in the same quarter was -$5.4B, so investment is being funded from outside the business. Valuecrab does not provide buy or sell recommendations.