Value Stocks would help us to Survive a Possible Recession: Oracle
Oracle is one of the important players in the technology sector. Its shares have lost 25% since the beginning of 2022. Its business is much more stable and cannot grow by double digits as some other younger peers in the sector. However, the company’s efforts towards developing cloud-based solutions are strong and stable financial results are prompting elevated demand for ORCL stocks as a safe haven asset.
The company has a diversified product portfolio from software to the management of financial activities, sales, and supply chains to infrastructure solutions like Oracle Autonomous Database. The company is on its way to transforming its business model to cloud-based solutions on the subscription basis.
The financial Q4 2022 that ended May 31 showed that cloud segment revenues rose by 19% year-on-year to $2.9 billion. Some businesses have performed even better. Fusion Cloud posted revenues up by 20% as the company is taking over in the health information technology sphere beating its peers like Kronos, Workday and SAP. Management is pushing up the development of the data management system MySQL that processes transactions seven times faster than same solution AWS Aurora from Amazon.
Oracle corporation management is expecting 2022 operational margin at 45-46%, that is very much above other software corporations and most importantly above the prepandemic level of Oracle itself when the operational margin reached 44%. The company pays regular dividends. It has also launched a buyback program to get its shares back at discount prices now. During the last four quarters Oracle has spent more than $16 billion for buybacks and may continue to spend money on this as its stock prices are going down.
The mid-term target price for ORCL stock at $78 is intact.