My trading plan on Oracle!
Thanks to cici @Invest With Cici for organizing the trading promotion, really help for me. Here is my trading plan based on the premium learn’s stock analysis template.
1. Financial Analysis
- Total Revenue: 12.45B, up 9% yoy, A significant slowdown from the 17% growth rate of the previous quarter.
- Net Income: 2.42B, down 56% yoy but down 26.5% QoQ.
- EPS: $1.19, up 15.5% yoy.
- Debt & Cash flow: stay level.
- Earnings Forecast: Forecasted cloud sales revenue growth of 29% to 31% is less than half the growth rate of the first fiscal quarter.
- Net Income: 2.42B, down 56% yoy but down 26.5% QoQ.
- EPS: $1.19, up 15.5% yoy.
- Debt & Cash flow: stay level.
- Earnings Forecast: Forecasted cloud sales revenue growth of 29% to 31% is less than half the growth rate of the first fiscal quarter.
2. Fundamental Valuation
- PE_TTM peers: 41x (industry average 37x)
- PE_TTM history: 100% above historical data
- Analyst Ratings: buy55%，hold45%，sell0
- Analyst Ratings Price: Highest tp $150, average tp $134, lowest tp $105
- PE_TTM history: 100% above historical data
- Analyst Ratings: buy55%，hold45%，sell0
- Analyst Ratings Price: Highest tp $150, average tp $134, lowest tp $105
3. Growth Assessment
- Cloud service revenue: 9.95B Cloud revenue grew at less than half the rate of the first fiscal quarter
- AI growth analysis: Oracle's RDMA-linked Supercluster, NVIDIA's cloud infrastructure service, trains AI models twice as fast and at less than half the cost of other clouds. Social media X, formerly known as Twitter, signed a deal with Oracle to train their AI models using Oracle's second-generation cloud. All nine of Warren Buffett-led Berkshire Hathaway's utilities will replace their existing enterprise resource planning systems with Oracle's Fusion Cloud applications.
- AI growth analysis: Oracle's RDMA-linked Supercluster, NVIDIA's cloud infrastructure service, trains AI models twice as fast and at less than half the cost of other clouds. Social media X, formerly known as Twitter, signed a deal with Oracle to train their AI models using Oracle's second-generation cloud. All nine of Warren Buffett-led Berkshire Hathaway's utilities will replace their existing enterprise resource planning systems with Oracle's Fusion Cloud applications.
4. Position Cost Analysis
- Position Cost Distribution: Average cost $118, pressure at $126
- PCD Analysis: In a risky area, Massive number of holdings are profitable
- PCD Analysis: In a risky area, Massive number of holdings are profitable
5. Technical Analysis
- Trending lines: The long term trend is above the 200 MA; The short term trend: 24-day MA also above the 50-day, up trending strongly; Although there has been a pullback since June, it has not been significant.
- Chart&Candle patterns: The uptrend saw three White Soliders and was immediately followed by a Dragonfly doji, suggesting stronger bearish forces.
- Oversold&Overbought: in a overbought area, Possible pullback
- Chart&Candle patterns: The uptrend saw three White Soliders and was immediately followed by a Dragonfly doji, suggesting stronger bearish forces.
- Oversold&Overbought: in a overbought area, Possible pullback
Overall Analysis
- fundamental: Oracle just reported slower revenue and profit growth, as well as slower revenue growth in its core cloud business expected in the next quarter. It's already down 8% after hours. But considering the AI-enabled growth of the company's cloud business, even though Oracle's cloud business is still well below Amazon, Microsoft, and Google. But the order book is already showing a decent increase.
- technical: Trending up but in overbought zone, not a good time to buy.
- technical: Trending up but in overbought zone, not a good time to buy.
- Buy Considerations: Fundamentals long term bullish, buy dip
- Sell Considerations: Stronger short-term downtrend due to earnings issues, below 50-day MA
- Sell Considerations: Stronger short-term downtrend due to earnings issues, below 50-day MA
Trading Plan
- Positioning: 10% position
- Buy Plan: 116 buy-in 4%, 112 buy-in 6%
- Stop-loss strategy: Short Stop 100 (down 7% of position)
- Take-profit strategy: 50% 130 PCD Pressure Level, 50% of 127
- Buy Plan: 116 buy-in 4%, 112 buy-in 6%
- Stop-loss strategy: Short Stop 100 (down 7% of position)
- Take-profit strategy: 50% 130 PCD Pressure Level, 50% of 127
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Invest With Cici : Great job!!! nice analysis. Very timely and insightful. Oracle’s cloud business is the core so slowing growth is dangerous. But the orders may continue to grow in the long term with the help of AI.
AdrianpohOP Invest With Cici: Many thanks, a great analysis method!