Should you buy Oracle shares despite lower-than-expected Q1 earnings?

Oracle Corporation (NYSE: ORCL) reported not-so-encouraging earnings for its fiscal first quarter on Monday. Shares are still up after the bell on better-than-expected revenue.  

Oracle shares are a buy here

The tech stock has already climbed 20% over the past three months but Brian J. White – Analyst at Monness Crespi Hardt is convinced the rally is far from over yet.

Despite a more precarious environment, we believe there remain tailwinds in Oracle’s cloud transformation, and there could be some sales wiggle room from Cerner.

Cerner – the health information technology company it bought last year for $28 billion brought in $1.40 billion in revenue this quarter. Oracle expects that acquisition to contribute even more moving forward.

White has a “buy” rating on Oracle shares with upside to $113 that represents a 45% upside from here. The stock is trading right at its 200-day MA in after-hours.

Key takeaways from Oracle Q1 earnings report

• Net income printed at $1.55 billion versus the year-ago $2.46 billion
• Per-share earnings slipped from 86 cents to 56 cents
• Adjusted EPS was $1.03 as per the earnings press release
• Revenue jumped 18% on a year-over-year basis to $11.45 billion
• Consensus was $1.08 of adjusted EPS on $11.33 billion in revenue
• Revenue from cloud services and license support jumped 14%
• Maintained quarterly cash dividend at 32 cents per share

Executives did not offer guidance for the future on Monday. You can listen to the earnings call here.