Intrinsic value of Oracle - ORCL

Previous Close

$46.60

  Intrinsic Value

$31.26

stock screener

  Rating & Target

sell

-33%

Previous close

$46.60

 
Intrinsic value

$31.26

 
Up/down potential

-33%

 
Rating

sell

We calculate the intrinsic value of ORCL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 185.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.30
  3.47
  3.62
  3.76
  3.88
  4.00
  4.10
  4.19
  4.27
  4.34
  4.41
  4.47
  4.52
  4.57
  4.61
  4.65
  4.68
  4.72
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
Revenue, $m
  41,145
  42,573
  44,116
  45,775
  47,553
  49,453
  51,479
  53,634
  55,924
  58,351
  60,923
  63,644
  66,521
  69,560
  72,767
  76,151
  79,718
  83,478
  87,439
  91,610
  96,001
  100,623
  105,486
  110,601
  115,981
  121,639
  127,587
  133,840
  140,413
  147,321
Variable operating expenses, $m
  22,011
  22,600
  23,236
  23,920
  24,653
  25,437
  26,273
  27,161
  28,106
  29,107
  25,125
  26,247
  27,433
  28,687
  30,009
  31,405
  32,876
  34,427
  36,060
  37,780
  39,591
  41,497
  43,503
  45,612
  47,831
  50,164
  52,617
  55,196
  57,907
  60,756
Fixed operating expenses, $m
  4,882
  4,990
  5,099
  5,211
  5,326
  5,443
  5,563
  5,685
  5,810
  5,938
  6,069
  6,202
  6,339
  6,478
  6,621
  6,767
  6,915
  7,068
  7,223
  7,382
  7,544
  7,710
  7,880
  8,053
  8,231
  8,412
  8,597
  8,786
  8,979
  9,177
Total operating expenses, $m
  26,893
  27,590
  28,335
  29,131
  29,979
  30,880
  31,836
  32,846
  33,916
  35,045
  31,194
  32,449
  33,772
  35,165
  36,630
  38,172
  39,791
  41,495
  43,283
  45,162
  47,135
  49,207
  51,383
  53,665
  56,062
  58,576
  61,214
  63,982
  66,886
  69,933
Operating income, $m
  14,252
  14,984
  15,780
  16,643
  17,573
  18,573
  19,643
  20,787
  22,008
  23,306
  29,729
  31,195
  32,749
  34,395
  36,137
  37,979
  39,927
  41,984
  44,156
  46,448
  48,866
  51,415
  54,103
  56,935
  59,920
  63,063
  66,373
  69,858
  73,527
  77,389
EBITDA, $m
  20,875
  21,662
  22,518
  23,444
  24,443
  25,515
  26,663
  27,890
  29,198
  30,590
  32,070
  33,640
  35,304
  37,067
  38,932
  40,905
  42,989
  45,191
  47,515
  49,967
  52,554
  55,281
  58,155
  61,184
  64,375
  67,736
  71,274
  75,000
  78,921
  83,048
Interest expense (income), $m
  1,612
  3,273
  2,827
  2,975
  3,135
  3,306
  3,490
  3,687
  3,896
  4,119
  4,356
  4,607
  4,873
  5,154
  5,451
  5,766
  6,097
  6,447
  6,816
  7,205
  7,614
  8,046
  8,500
  8,978
  9,481
  10,009
  10,566
  11,151
  11,766
  12,413
  13,092
Earnings before tax, $m
  10,979
  12,156
  12,805
  13,508
  14,267
  15,083
  15,957
  16,891
  17,889
  18,951
  25,123
  26,322
  27,595
  28,943
  30,371
  31,882
  33,480
  35,168
  36,951
  38,833
  40,820
  42,916
  45,125
  47,455
  49,910
  52,497
  55,222
  58,092
  61,115
  64,297
Tax expense, $m
  2,964
  3,282
  3,457
  3,647
  3,852
  4,072
  4,308
  4,561
  4,830
  5,117
  6,783
  7,107
  7,451
  7,815
  8,200
  8,608
  9,039
  9,495
  9,977
  10,485
  11,021
  11,587
  12,184
  12,813
  13,476
  14,174
  14,910
  15,685
  16,501
  17,360
Net income, $m
  8,015
  8,874
  9,348
  9,861
  10,415
  11,010
  11,648
  12,331
  13,059
  13,834
  18,340
  19,215
  20,144
  21,129
  22,171
  23,274
  24,440
  25,673
  26,974
  28,348
  29,799
  31,328
  32,941
  34,642
  36,434
  38,323
  40,312
  42,407
  44,614
  46,937

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  87,543
  90,581
  93,863
  97,393
  101,176
  105,219
  109,530
  114,116
  118,986
  124,152
  129,624
  135,413
  141,534
  147,999
  154,823
  162,023
  169,613
  177,613
  186,041
  194,915
  204,258
  214,091
  224,437
  235,321
  246,768
  258,805
  271,461
  284,766
  298,751
  313,449
Adjusted assets (=assets-cash), $m
  87,543
  90,581
  93,863
  97,393
  101,176
  105,219
  109,530
  114,116
  118,986
  124,152
  129,624
  135,413
  141,534
  147,999
  154,823
  162,023
  169,613
  177,613
  186,041
  194,915
  204,258
  214,091
  224,437
  235,321
  246,768
  258,805
  271,461
  284,766
  298,751
  313,449
Revenue / Adjusted assets
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
Average production assets, $m
  31,929
  33,037
  34,234
  35,521
  36,901
  38,376
  39,948
  41,620
  43,397
  45,281
  47,276
  49,388
  51,620
  53,978
  56,467
  59,093
  61,861
  64,779
  67,853
  71,090
  74,497
  78,083
  81,857
  85,826
  90,001
  94,391
  99,007
  103,860
  108,960
  114,321
Working capital, $m
  -6,213
  -6,429
  -6,661
  -6,912
  -7,180
  -7,467
  -7,773
  -8,099
  -8,444
  -8,811
  -9,199
  -9,610
  -10,045
  -10,503
  -10,988
  -11,499
  -12,037
  -12,605
  -13,203
  -13,833
  -14,496
  -15,194
  -15,928
  -16,701
  -17,513
  -18,367
  -19,266
  -20,210
  -21,202
  -22,245
Total debt, $m
  52,361
  55,095
  58,049
  61,226
  64,631
  68,269
  72,149
  76,276
  80,660
  85,309
  90,233
  95,444
  100,952
  106,771
  112,913
  119,392
  126,224
  133,424
  141,009
  148,996
  157,404
  166,254
  175,566
  185,361
  195,663
  206,497
  217,887
  229,861
  242,448
  255,676
Total liabilities, $m
  78,789
  81,523
  84,477
  87,654
  91,059
  94,697
  98,577
  102,704
  107,088
  111,737
  116,661
  121,872
  127,380
  133,199
  139,341
  145,820
  152,652
  159,852
  167,437
  175,424
  183,832
  192,682
  201,994
  211,789
  222,091
  232,925
  244,315
  256,289
  268,876
  282,104
Total equity, $m
  8,754
  9,058
  9,386
  9,739
  10,118
  10,522
  10,953
  11,412
  11,899
  12,415
  12,962
  13,541
  14,153
  14,800
  15,482
  16,202
  16,961
  17,761
  18,604
  19,492
  20,426
  21,409
  22,444
  23,532
  24,677
  25,881
  27,146
  28,477
  29,875
  31,345
Total liabilities and equity, $m
  87,543
  90,581
  93,863
  97,393
  101,177
  105,219
  109,530
  114,116
  118,987
  124,152
  129,623
  135,413
  141,533
  147,999
  154,823
  162,022
  169,613
  177,613
  186,041
  194,916
  204,258
  214,091
  224,438
  235,321
  246,768
  258,806
  271,461
  284,766
  298,751
  313,449
Debt-to-equity ratio
  5.980
  6.080
  6.180
  6.290
  6.390
  6.490
  6.590
  6.680
  6.780
  6.870
  6.960
  7.050
  7.130
  7.210
  7.290
  7.370
  7.440
  7.510
  7.580
  7.640
  7.710
  7.770
  7.820
  7.880
  7.930
  7.980
  8.030
  8.070
  8.120
  8.160
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  8,015
  8,874
  9,348
  9,861
  10,415
  11,010
  11,648
  12,331
  13,059
  13,834
  18,340
  19,215
  20,144
  21,129
  22,171
  23,274
  24,440
  25,673
  26,974
  28,348
  29,799
  31,328
  32,941
  34,642
  36,434
  38,323
  40,312
  42,407
  44,614
  46,937
Depreciation, amort., depletion, $m
  6,623
  6,678
  6,737
  6,801
  6,869
  6,942
  7,020
  7,103
  7,191
  7,284
  2,340
  2,445
  2,555
  2,672
  2,795
  2,925
  3,062
  3,207
  3,359
  3,519
  3,688
  3,866
  4,052
  4,249
  4,456
  4,673
  4,901
  5,142
  5,394
  5,659
Funds from operations, $m
  14,638
  15,552
  16,085
  16,662
  17,284
  17,953
  18,669
  19,434
  20,250
  21,118
  20,680
  21,660
  22,700
  23,801
  24,966
  26,199
  27,503
  28,879
  30,333
  31,868
  33,487
  35,194
  36,994
  38,891
  40,890
  42,996
  45,214
  47,549
  50,008
  52,596
Change in working capital, $m
  -198
  -216
  -233
  -251
  -269
  -287
  -306
  -325
  -346
  -367
  -388
  -411
  -434
  -459
  -484
  -511
  -539
  -568
  -598
  -630
  -663
  -698
  -734
  -772
  -812
  -854
  -898
  -944
  -993
  -1,043
Cash from operations, $m
  14,836
  15,768
  16,318
  16,913
  17,553
  18,240
  18,975
  19,759
  20,595
  21,485
  21,068
  22,071
  23,134
  24,260
  25,451
  26,710
  28,041
  29,447
  30,931
  32,498
  34,150
  35,892
  37,728
  39,663
  41,702
  43,850
  46,112
  48,493
  51,000
  53,639
Maintenance CAPEX, $m
  -1,529
  -1,581
  -1,635
  -1,695
  -1,758
  -1,827
  -1,900
  -1,978
  -2,060
  -2,148
  -2,242
  -2,340
  -2,445
  -2,555
  -2,672
  -2,795
  -2,925
  -3,062
  -3,207
  -3,359
  -3,519
  -3,688
  -3,866
  -4,052
  -4,249
  -4,456
  -4,673
  -4,901
  -5,142
  -5,394
New CAPEX, $m
  -1,036
  -1,108
  -1,197
  -1,287
  -1,380
  -1,475
  -1,572
  -1,673
  -1,776
  -1,884
  -1,996
  -2,112
  -2,232
  -2,358
  -2,489
  -2,626
  -2,768
  -2,918
  -3,074
  -3,237
  -3,408
  -3,586
  -3,773
  -3,970
  -4,175
  -4,390
  -4,616
  -4,852
  -5,101
  -5,361
Cash from investing activities, $m
  -2,565
  -2,689
  -2,832
  -2,982
  -3,138
  -3,302
  -3,472
  -3,651
  -3,836
  -4,032
  -4,238
  -4,452
  -4,677
  -4,913
  -5,161
  -5,421
  -5,693
  -5,980
  -6,281
  -6,596
  -6,927
  -7,274
  -7,639
  -8,022
  -8,424
  -8,846
  -9,289
  -9,753
  -10,243
  -10,755
Free cash flow, $m
  12,271
  13,079
  13,486
  13,931
  14,414
  14,938
  15,503
  16,109
  16,758
  17,452
  16,831
  17,619
  18,457
  19,346
  20,289
  21,289
  22,347
  23,467
  24,651
  25,902
  27,223
  28,617
  30,089
  31,642
  33,279
  35,004
  36,823
  38,739
  40,758
  42,884
Issuance/(repayment) of debt, $m
  -8,258
  2,734
  2,954
  3,177
  3,405
  3,639
  3,879
  4,127
  4,384
  4,649
  4,925
  5,211
  5,508
  5,819
  6,142
  6,479
  6,832
  7,200
  7,585
  7,987
  8,409
  8,850
  9,312
  9,795
  10,302
  10,834
  11,390
  11,974
  12,586
  13,229
Issuance/(repurchase) of shares, $m
  3,080
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -5,178
  2,734
  2,954
  3,177
  3,405
  3,639
  3,879
  4,127
  4,384
  4,649
  4,925
  5,211
  5,508
  5,819
  6,142
  6,479
  6,832
  7,200
  7,585
  7,987
  8,409
  8,850
  9,312
  9,795
  10,302
  10,834
  11,390
  11,974
  12,586
  13,229
Total cash flow (excl. dividends), $m
  7,093
  15,813
  16,439
  17,107
  17,819
  18,577
  19,382
  20,236
  21,142
  22,101
  21,756
  22,830
  23,965
  25,165
  26,431
  27,768
  29,179
  30,667
  32,236
  33,889
  35,631
  37,467
  39,401
  41,437
  43,581
  45,838
  48,213
  50,714
  53,345
  56,113
Retained Cash Flow (-), $m
  -11,094
  -304
  -328
  -353
  -378
  -404
  -431
  -459
  -487
  -517
  -547
  -579
  -612
  -647
  -682
  -720
  -759
  -800
  -843
  -887
  -934
  -983
  -1,035
  -1,088
  -1,145
  -1,204
  -1,266
  -1,330
  -1,398
  -1,470
Prev. year cash balance distribution, $m
  48,066
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  44,065
  15,509
  16,111
  16,754
  17,441
  18,173
  18,951
  19,778
  20,655
  21,585
  21,208
  22,251
  23,353
  24,518
  25,749
  27,048
  28,420
  29,867
  31,393
  33,002
  34,697
  36,484
  38,366
  40,348
  42,436
  44,634
  46,948
  49,383
  51,946
  54,643
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  42,248
  14,198
  14,021
  13,796
  13,519
  13,189
  12,803
  12,362
  11,865
  11,316
  10,072
  9,495
  8,879
  8,231
  7,559
  6,874
  6,184
  5,500
  4,834
  4,193
  3,589
  3,027
  2,515
  2,055
  1,651
  1,302
  1,008
  764
  567
  411
Current shareholders' claim on cash, %
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Oracle Corporation (Oracle) provides products and services that address all aspects of corporate information technology (IT) environments, including application, platform and infrastructure. The Company's businesses include cloud and on-premise software, hardware and services. Its cloud and on-premise software business consists of three segments, including cloud software and on-premise software, which includes Software as a Service (SaaS) and Platform as a Service (PaaS) offerings, cloud infrastructure as a service (IaaS) and software license updates and product support. Its hardware business consists of two segments, including hardware products and hardware support. The Company's services business includes the remainder of the Company's segments. Its services business includes activities, such as consulting services, enhanced support services and education services, among others.

FINANCIAL RATIOS  of  Oracle (ORCL)

Valuation Ratios
P/E Ratio 20.7
Price to Sales 5.1
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow 13.6
Price to Free Cash Flow 15.9
Growth Rates
Sales Growth Rate 1.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 70%
Cap. Spend. - 3 Yr. Gr. Rate 28.4%
Financial Strength
Quick Ratio 7
Current Ratio 0
LT Debt to Equity 87.5%
Total Debt to Equity 105.7%
Interest Coverage 8
Management Effectiveness
Return On Assets 8.6%
Ret/ On Assets - 3 Yr. Avg. 9.5%
Return On Total Capital 9.3%
Ret/ On T. Cap. - 3 Yr. Avg. 10.6%
Return On Equity 18.5%
Return On Equity - 3 Yr. Avg. 19.3%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 80.2%
Gross Margin - 3 Yr. Avg. 80.1%
EBITDA Margin 41.3%
EBITDA Margin - 3 Yr. Avg. 42.3%
Operating Margin 33.7%
Oper. Margin - 3 Yr. Avg. 34.7%
Pre-Tax Margin 30.5%
Pre-Tax Margin - 3 Yr. Avg. 31.7%
Net Profit Margin 24.7%
Net Profit Margin - 3 Yr. Avg. 24.9%
Effective Tax Rate 18.9%
Eff/ Tax Rate - 3 Yr. Avg. 21.2%
Payout Ratio 28.2%

ORCL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ORCL stock intrinsic value calculation we used $39831 million for the last fiscal year's total revenue generated by Oracle. The default revenue input number comes from 0001 income statement of Oracle. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ORCL stock valuation model: a) initial revenue growth rate of 3.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ORCL is calculated based on our internal credit rating of Oracle, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Oracle.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ORCL stock the variable cost ratio is equal to 53.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $4777 million in the base year in the intrinsic value calculation for ORCL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Oracle.

Corporate tax rate of 27% is the nominal tax rate for Oracle. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ORCL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ORCL are equal to 77.6%.

Life of production assets of 20.2 years is the average useful life of capital assets used in Oracle operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ORCL is equal to -15.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $45726 million for Oracle - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 3981.16 million for Oracle is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Oracle at the current share price and the inputted number of shares is $185.5 billion.

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COMPANY NEWS

▶ Oracle Earnings, Revenue beat in Q2   [01:06AM  Investing.com]
▶ [$$] Oracle Revenue Flat as Push to Bolster Cloud Business Continues   [Dec-17-18 10:55PM  The Wall Street Journal]
▶ Oracle Earnings Beat On Top And Bottom Line, Stock Up   [04:16PM  Investor's Business Daily]
▶ Oracle: Fiscal 2Q Earnings Snapshot   [04:16PM  Associated Press]
▶ [$$] Oracle's Cloud Struggles Diminish Expectations   [05:30AM  The Wall Street Journal]
▶ Better Cloud Stock: Veeva Systems vs. Salesforce   [Dec-16-18 04:30PM  Motley Fool]
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▶ Warren Buffett's Favorite Tech Stocks   [Dec-13-18 06:18PM  GuruFocus.com]
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▶ Oracle Rises 3%   [01:46PM  Investing.com]
▶ Theres a new legal twist in the JEDI procurement   [Dec-10-18 02:25PM  American City Business Journals]
▶ Tech execs at White House field ideas for US dominance   [Dec-06-18 04:34PM  Associated Press]
▶ Oracle Falls 3%   [11:34AM  Investing.com]
▶ Tech leaders head to White House for summit   [10:35AM  Yahoo Finance Video]
▶ Google, IBM, Oracle to Talk Tech at White House   [Dec-05-18 03:38PM  Bloomberg]
▶ Is Oracle Corporation (NASDAQ:ORCL) A Good Stock To Buy?   [Dec-04-18 05:03PM  Insider Monkey]
▶ [$$] Oracle Chief Sees Cloud as 'Irresistible Force' for CIOs   [Dec-03-18 12:17PM  The Wall Street Journal]
▶ AWS wants to rule the world   [Dec-02-18 12:46PM  TechCrunch]
▶ Thinking of protesting a government contract? You may want to pursue this argument.   [Nov-30-18 01:14PM  American City Business Journals]
▶ Trump to meet with several tech CEOs amid rising tensions   [Nov-29-18 07:41PM  Associated Press]
▶ How Innovative Is MongoDB?   [08:18AM  Motley Fool]
▶ Slow and steady wins race for Matrixx leader Dave Labuda   [05:41PM  American City Business Journals]
▶ 6 interesting things in GAOs decision denying Oracles JEDI protest   [02:45PM  American City Business Journals]
▶ Heres what HQ2 could mean for Amazon Web Services public sector business   [Nov-21-18 01:24PM  American City Business Journals]
▶ Oracle Falls 3%   [04:08PM  Investing.com]
▶ 4 Reasons a New CEO Wont Solve Googles Cloud Problems   [Nov-19-18 07:30PM  Motley Fool]

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