Asset Structure Analysis
Oracle Corporation’s total assets were $141 billion and $134.4 billion as of May 31, 2024 and May 31, 2023, respectively.
Property, plant and equipment, net were $21.5 billion as of May 31, 2024, accounting for 15.2% of total assets.
Intangible assets, net was $6.9 billion as of May 31, 2024, consisting of 4.9% of total assets.
Goodwill, net was $62.2 billion as of May 31, 2024, comprising 44% of total assets.
Deferred tax assets were $12.3 billion as of May 31, 2024, making up 8.7% of total assets. This figure is very high, and the tax burden may be reduced in the future.
Other non-current assets were $15.5 billion as of May 31, 2024, accounting for 11% of total assets.
Total current assets were $22.6 billion as of May 31, 2023, making up 16% of total assets.
Among total current assets, cash and cash equivalents were $10.5 billion, trade receivables were $7.87 billion, and prepaid expenses and other current assets were $4 billion.
As you can see, the amount of goodwill is very huge, which mean that the company completed a lot of acquisitions, and acquiring is a expand strategy.
Liquidity and Solvency
Total current liabilities were $31.5 billion as of May 31, 2024.
The current ratio was about 0.72, which dose not mean that Oracle Corporation’s liquidity is sufficient, and the company could generate a lot of cash flow to maintain liquidity.
Total current liabilities were $100.2 billion as of May 31, 2024.
The debt ratio was 71% for fiscal 2024.
Subtracting the amount of goodwill and intangible assets from total assets, the adjusted debt ratio would be more high.
Oracle Corporation’s net cash provided by operating activities was $18.7 billion, $17.2 billion and $9.5 billion in fiscal 2024, 2023 and 2021, respectively.
We are glad that the company’s cash flow is very strong with maintaining huge debt, but the company hit a level of high debt.
Profitability Analysis
Oracle Corporation’s revenues were $53 billion, 50 billion and $42.4 billion in fiscal 2024, 2023 and 2021, respectively.
The revenues in fiscal 2024 was up 6% year on year.
The revenues in fiscal 2023 was up 18% year on year.
The company has four reportable segment: cloud services and license support($39.4 billion), cloud license and on-premise license($5.08 billion), hardware($3.07 billion), and services($5.4 billion).
Operating income was $15.4 billion, $13.1 billion and $10.9 billion in fiscal 2024, 2023 and 2022, respectively.
Oracle Corporation’s operating profit margin was 29%, 26.2% and 25.8% in fiscal 2024, 2023 and 2022, respectively.
Interest expenses were $3.5 billion, $3.5 billion and $2.76 billion in fiscal 2024, 2023 and 2022, respectively.
if interest rate is 5% on interest expenses, total liabilities would be about $70 billion.
I want to say that the amount of the company’s liabilities is very huge.
Net income was $10.5 billion, $8.5 billion and $6.7 billion in fiscal 2024, 2023 and 2022, respectively.
Cash Flow Analysis
Oracle Corporation’s net cash provided by operating activities was $18.7 billion, $17.2 billion and $9.5 billion in fiscal 2024, 2023 and 2021, respectively.
Stock-based compensation was $3.97 billion, $3.55 billion and $2.6 billion in fiscal 2024, 2023 and 2022, respectively.
Finally, stock-based compensation will be setoff by stock repurchases.
Capital expenditures was $6.87 billion, $8.7 billion and $4.5 billion for fiscal 2024, 2023 and 2022, respectively.
The company ‘s free cash flow was $11.83 billion, $8.5 billion and $5 billion for fiscal 2024, 2023 and 2022, respectively.
Payments for repurchases of common stock were $1.2 billion, $1.3 billion and $16.2 billion in fiscal 2024, 2023 and 2022, respectively.
Proceeds from issuances of common stock were $742 million, $1.2 billion and $482 million in fiscal 2024, 2023 and 2022, respectively.
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards were $2 billion, $1.2 billion and $1.1 billion in fiscal 2024, 2023 and 2022, respectively.
Payments of dividends to stockholders were $4.4 billion, $3.7 billion and $3.5 billion in fiscal 2024, 2023 and 2022, respectively.
As you can see that the company returned capital to shareholders by shares repurchases and dividends.
Conclusion
We reckon that Oracle Corporation’s reasonable valuation is $150 billion to $200 billion, while Oracle Corporation’s market capitalization is about $385.5 billion, which is equivalent to $139.89 per share.
Disclaimer: The content is for reference only and does not constitute investment advice.
Introduction
Oracle provides products and services that address enterprise information technology (IT) needs. Our products and services include enterprise applications and infrastructure offerings that are delivered worldwide through a variety of flexible and interoperable IT deployment models. These models include on-premise, cloud-based and hybrid deployments (an approach that combines both on-premise and cloud-based deployments), such as Oracle Exadata Cloud@Customer and Dedicated Region offerings (instances of Oracle Cloud in a customer’s own data center) and multicloud options that enable customers to use Oracle Cloud in conjunction with other public clouds. Accordingly, we offer choice and flexibility to our customers and facilitate the product, service and deployment combinations that best suit our customers’ needs. Our customers include businesses of many sizes, government agencies, educational institutions and resellers that we market and sell to directly through our worldwide sales force or indirectly through the Oracle Partner Network. Using Oracle technologies, our customers build, deploy, run, manage and support their internal and external products, services and business operations, including, for example, an artificial intelligence (AI) product company that uses Oracle Cloud Infrastructure (OCI) to build and serve generative AI models; a global technology company that uses OCI to power its logistics and mobile application offerings; a multinational financial institution that runs its banking applications using Oracle Exadata Cloud@Customer; and a global consumer products company that leverages Oracle Fusion Cloud Enterprise Resource Planning (ERP) for its accounting processes, risk management, supply chain and financial planning functions.