from: https://articles.marketrealist.com/2019/03/the-90s-called-they-want-to-know-why-you-are-buying-oracle/
The 90’s Called. They Want to Know Why You Are Buying Oracle.
WRITTEN BY JP GRAVITT FEATURED IN COMPANY NEWS, INSIGHTS, s Called. They Want to Know Why You Are Buying Oracle.
Really? Larry Ellison: yacht racing and a $50 million Japanese-style house. Sweet. But is the stock really a buy now? Sure they bought Netsuite so Netsuite would stock eating their lunch. And sure they are a cloud company now. But it seems to me like the bulk of what they do is still databases and ERP – maybe tools too. And Netsuite did have high 30’s growth, but still. I would much rather own MongoDB (MDB) for database growth. Let’s take a look at the revenue growth.
2016: 0%
2017: 5%
2018: 1%
2019e: 0%
2020e: 2%
2021e: 2%
And right now you get to pay 4.6 times revenue for that. Over the last 10 years, that multiple has range from 3.2 times to 5.3 times – so you are closer to the top than the bottom. And sure Oracle (ORCL) can manufacture 10% EPS growth this year (dropping to 6% next year), but for how long?
The stock is overbought on an RSI basis and recently completed a Wave indicating the end of a trend. The stock is up 18.3% this year, besting the Nasdaq (QQQ) by almost 2.5%.
The dividend yield is only 1.8%.
Look, who knows what will happen with Oracle or with the economy? But it seems pretty pricey with this global economic backdrop.
Here are some things from the 90’s I would like more than Oracle’s stock: grunge, a Roxette album, a Blockbuster video card, a Sony Walkman, and a Nintendo Gameboy – just sayin’.