Oracle(US:ORCL) Zhi Tong Cai Jing·2025-12-08 09:38Core Viewpoint - Oracle (ORCL.US) is set to release its Q2 FY2026 earnings report on December 10, 2023, with analysts expecting revenue of $16.22 billion, a year-over-year increase of 15.4%, and a non-GAAP EPS of $1.64, reflecting an 11.6% growth [1] Revenue and Earnings Performance - Historical data shows Oracle has only exceeded revenue expectations twice in the past eight quarters, with an average revenue surprise of -0.34% [2] - The average positive surprise for EPS is 1.02%, with Oracle achieving a roughly 50% success rate in beating EPS estimates [3] Market Sentiment and Stock Reaction - Despite a strong performance in cloud infrastructure and record remaining performance obligations (RPO), market sentiment remains cautious due to supply chain constraints and high revenue growth expectations [4] - On average, Oracle's stock price has increased by 8.52% in the week following earnings reports, although recent performance has been weak, with a decline of over 35% since reaching a historical high in September [5] Key Areas of Investor Focus - Investors should closely monitor Oracle's debt situation, cash flow, and developments related to its partnership with OpenAI, especially given the significant capital expenditures and concerns over the company's ability to fulfill large orders [6][7] - The company reported a Q1 FY2026 revenue of $14.93 billion, a 12.2% year-over-year increase, but fell short of market expectations by $1.17 billion [6] Financial Metrics and Valuation - Oracle's current forward P/E ratio is approximately 29.5, lower than its previous 35.5 but still above the five-year average of 21.3 [8] - The projected EPS for FY2026 is $6.16, with a target price of around $215 based on a forward P/E of 29.5, indicating limited upside potential at current levels [9] Upcoming Earnings Report Focus - The market will focus on management's comments regarding debt plans for AI infrastructure, the timeline for returning to positive cash flow, and updates on the OpenAI deal [10]