Oracle Corporation (ORCL): This Company Is a Must-Have Tech Stock

Final verdict

The company believes that they have four major competitors. SAP is certainly competing in the classic on-premise application space, but not in the cloud or industry specific areas. Salesforce.com has undoubtedly been at the forefront. However, in a reasonably short span of time they are the number two, with over a billion dollars in business through the cloud. Though SAP can also play well for investors if it plays its business intelligence and data management cards well but Oracle’s biggest product lines, databases and enterprise resource management solutions can earn quite a decent return for investors.

The chart below shows that the P/E Ratio of Oracle is lower than the industry’s average and competitors like SAP, EMC & Microsoft.

The majority of analysts (67%) rate Oracle as a buy. This compares favorably to the analyst ratings of its nearest 10 competitors, which average 49% buys. Analysts are generally bullish on Oracle, as 22 analysts rate it as a buy and only one analyst rates it as a sell.

With Oracle’s stock currently trading at about $30.14 per share, its P/E ratio is about 14 times its trailing earnings per share of about $2.15. If you apply a 14 multiple to 2014 estimated average EPS of $2.89, you arrive at a target price of about $40.46, which would represent potential upside of about 34% from the current price. However, there could be a downside risk if Oracle fails to positively continue its key trends.

quratulain kamila has no position in any stocks mentioned. The Motley Fool owns shares of International Business Machines (NYSE:IBM)., Microsoft, and Oracle.

The article This Company Is a Must-Have Tech Stock originally appeared on Fool.com and is written by quratulain kamila.

quratulain is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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