TLDR
- Oracle stock has given back all 2025 gains in 2026, but trades at just 17.2x expected Fiscal 2027 non-GAAP EPS of $8.14.
- The company is forecasting 34% revenue growth in Fiscal 2027, targeting sales above $90 billion.
- High interest rates and $19.9 billion in new stock issuance are weighing on EPS growth, limiting expansion to around 18.5%.
- Mizuho reiterated an Outperform rating with a $320 price target, citing strong execution and accelerating cloud capacity.
- Wall Street holds a Strong Buy consensus with an average price target of $251.77, implying roughly 79% upside.
Oracle stock has had a rough 2026. ORCL has erased all of its 2025 gains, sitting around $144.83 as of Tuesday, even as the company’s underlying business keeps growing.
Despite the drop, the numbers tell an interesting story. Oracle is guiding for revenue above $90 billion in Fiscal 2027, which would represent 34% year-over-year growth. That would be the highest top-line growth rate the company has seen in over a decade.
Oracle Cloud Infrastructure is a big part of that story. OCI posted 120% year-over-year growth in constant currency last quarter. AI workloads are driving demand, and management says it is bringing capacity online ahead of schedule in some cases.
The company also just posted Q1 Fiscal 2027 results that beat on both revenue and earnings. Non-GAAP EPS came in at $1.92, up nearly 30% year-over-year. That marks the third consecutive quarter of revenue and EPS upside, according to Mizuho.
Mizuho reiterated its Outperform rating and kept its $320 price target. The firm pointed to Oracle’s operating expense discipline, with operating margin rising about 35 basis points year-over-year despite gross margin pressure.
EPS Growth Faces Real Headwinds
The headline growth numbers look strong, but EPS tells a more complicated story. Oracle issued $19.9 billion in new stock to fund its expansion. That dilution, combined with rising interest rates, limits non-GAAP EPS growth to around 18.5% for the full year, well below the pace of revenue growth.
Oracle also carries $125.3 billion in debt, making it one of the more leveraged names in tech. Free cash flow was negative $5.4 billion in Q1 2027, continuing a trend from last fiscal year. Management expects Fiscal 2027 and 2028 to be peak capex years, with the company approaching self-funding after that.
Guidance was still raised after just one quarter of Fiscal 2027, with net capital expenditures expected to come in at no more than $70 billion.
What Analysts Are Saying
Analyst opinions are broadly positive but not uniform. UBS raised its price target to $250. DA Davidson kept a Buy rating with a $225 target. Bernstein held its Outperform rating at $325. On the other side, Freedom Broker trimmed its target to $205 and Stifel cut to $200, both citing margin pressure concerns.
InvestingPro data shows 14 analysts revised earnings estimates higher ahead of the upcoming period. The stock’s PEG ratio sits at 0.51, which InvestingPro flags as undervalued relative to fair value.
Wall Street overall gives ORCL a Strong Buy consensus, based on 25 Buy ratings and four Holds in the past three months. No analyst currently rates the stock a Sell.
The average price target across Wall Street sits at $251.77, implying about 79% upside from current levels.
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