Oracle Q1 earnings: ‘their valuation is favourable’

Oracle Corp (NYSE: ORCL) lost nearly 10% in extended hours after reporting revenue for its first financial quarter that came in slightly shy of Street estimates.

Why else is Oracle stock down in after-hours?

The stock is sinking also because cloud license and on-premise license revenue printed at $809 million – down 10% year-on-year and some $84 million short of expectations.

Oracle reported hardware and services revenues at $714 million and $1.38 billion, respectively – both below consensus. Still, Jefferies analyst Brent Thill told Bloomberg today:

Shares of the computer technology company are still up more than 35% versus the start of 2023.

Oracle is an AI name

A 13% annualised growth in cloud services and license support revenue was well above Street estimates, as per the earnings press release.

Oracle added generative AI capabilities to its Fusion Cloud HCM in the recently concluded quarter. According to the Jefferies analyst:

His “buy” rating on Oracle stock comes with a $145 price target that suggests about a 27% upside from here.

Notable figures in Oracle Q1 earnings release

• Earned $2.42 billion versus the year-ago $1.55 billion
• Per-share earnings also climbed from 56 cents to 86 cents
• Adjusted EPS printed at $1.19 as per the press release
• Revenue jumped 9.0% year-over-year to $12.45 billion
• Consensus was $1.15 a share on $12.47 billion in revenue

Oracle said its cloud infrastructure revenue was up 66% in the first quarter. Brent Thill added: