Value
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.3 |
| P/S | 6.2 |
| EV/EBITDA | 1.2 |
| Fwd P/E | 8.7 |
| PEG | 8.2 |
| Analyst target | 9.0 |
- ▸Forward P/E: 12.8x
- ▸PEG: 0.81
ORCL · Why this verdict
Why Oracle (ORCL) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue grew 21% year-over-year, supported by cloud infrastructure expansion, placing Oracle well above average growth rates for legacy enterprise software vendors. Growth breakdown | Revenue growth remains above 15% for at least 2 consecutive quarters over the next 12 months. | →Stable |
| CounterLeverage of 3.6x debt-to-equity carries a significant penalty and limits financial flexibility, while cloud migration revenue may be partially a one-time pull-forward. | ||
Oracle earns a 53% return on equity and holds a wide economic moat classification, reflecting the deep switching costs embedded in enterprise software infrastructure deployments. Quality breakdown | Return on equity remains above 40% and moat classification is maintained for the next 4 reported quarters. | →Stable |
| CounterNegative free cash flow at 119% of net income means reported earnings substantially overstate cash returns; the moat may be financially hollow if capex to sustain it keeps escalating. | ||
Oracle beat earnings estimates in 3 of the last 4 quarters, with a 38% positive surprise in December 2025 and an average positive surprise of 11.3%, indicating the business is executing above consensus expectations. Earnings | Earnings beats continue in at least 2 of the next 4 quarters with average positive surprise above 5%. | →Stable |
| CounterOne miss of negative 3.7% in September 2025 shows the beat streak is not guaranteed, and elevated put-to-call ratios of 1.91 suggest hedged institutions expect downside risk. | ||
A confirmed death cross has triggered a hard block on new position entry, with the moving average declining at 3.0% over 30 days and falling on-balance volume confirming institutional distribution. Momentum breakdown | Price crosses back above the 200-day moving average and the moving average slope turns positive within 12 months. | →Stable |
| CounterWith 33% analyst upside and strong long-term fundamentals, the current technical weakness may represent a buying opportunity for patient investors. | ||
Revenue grew 21% year-over-year, supported by cloud infrastructure expansion, placing Oracle well above average growth rates for legacy enterprise software vendors.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 15% for at least 2 consecutive quarters over the next 12 months.
CounterLeverage of 3.6x debt-to-equity carries a significant penalty and limits financial flexibility, while cloud migration revenue may be partially a one-time pull-forward.
Oracle earns a 53% return on equity and holds a wide economic moat classification, reflecting the deep switching costs embedded in enterprise software infrastructure deployments.
→StableQuality breakdown
- Expectation
- Return on equity remains above 40% and moat classification is maintained for the next 4 reported quarters.
CounterNegative free cash flow at 119% of net income means reported earnings substantially overstate cash returns; the moat may be financially hollow if capex to sustain it keeps escalating.
Oracle beat earnings estimates in 3 of the last 4 quarters, with a 38% positive surprise in December 2025 and an average positive surprise of 11.3%, indicating the business is executing above consensus expectations.
→StableEarnings
- Expectation
- Earnings beats continue in at least 2 of the next 4 quarters with average positive surprise above 5%.
CounterOne miss of negative 3.7% in September 2025 shows the beat streak is not guaranteed, and elevated put-to-call ratios of 1.91 suggest hedged institutions expect downside risk.
A confirmed death cross has triggered a hard block on new position entry, with the moving average declining at 3.0% over 30 days and falling on-balance volume confirming institutional distribution.
→StableMomentum breakdown
- Expectation
- Price crosses back above the 200-day moving average and the moving average slope turns positive within 12 months.
CounterWith 33% analyst upside and strong long-term fundamentals, the current technical weakness may represent a buying opportunity for patient investors.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Oracle carries a wide economic moat, exceptional return on equity of 53%, and strong analyst upside of 33%, but a confirmed downtrend with a death cross, elevated put-to-call ratio of 1.91, and negative free cash flow make this a hold-not-buy situation until momentum recovers.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 4.3 |
| Gross margin | 9.2 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 4.3 |
| FCF quality | 0.0 |
| Moat | 7.5 |
| Rule of 40 | 3.0 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 53%
- ▸Strong margins: 25%
- ▸Earnings quality RED FLAG: -144% FCF/NI
- ▸Wide economic moat
Growth
7.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.6 |
| EPS growth | 6.4 |
- ▸Strong growth: 21% YoY
Momentum
2.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 5.8 |
- ▸Capitulation risk (RSI 15, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -4.2%/30d — confirmed downtrend
Sentiment
8.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.2 |
| Analyst rating | 7.5 |
| Price target | 9.9 |
- ▸LLM news sentiment: +0.65 (n=10)
- ▸Analyst upside: 80%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $66,306,890 (0.016% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.5 |
| quality rank | 9.2 |
| growth rank | 5.6 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.4 |
| support resistance | 9.9 |
| 52w position | 0.0 |
Risk (lower is worse)
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.9 |
| days to cover | 9.5 |
| volatility | 0.0 |
| put call | 7.3 |
| implied vol | 1.8 |
| beta | 4.5 |
| debt equity | 1.1 |
- ▸High IV: 69%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 8.8 |
| dividend safety | 7.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 143.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:5.6>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:68d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.2<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
5.61
Upside
+65.9%
Downside
11.7%
Sizing output
AVOID
SetupOversold Bounce — Oversold RSI 15, near Bollinger lower, volume surge
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -59% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 4.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 8.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.2<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 5.61 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 8.4, Growth at 7.0, and Value at 6.9; the weakest are Momentum at 2.2, Risk (lower is worse) at 4.7, and Peer rank at 4.8. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 5.61 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Moat High Roe
Trip ifReturn on equity falls below 30% for any reported quarter.
- P2Earnings Beat Streak
Trip ifEarnings miss exceeds negative 10% for 2 consecutive quarters.
- P3Revenue Growth 21pct
Trip ifRevenue growth falls below 10% for 2 consecutive quarters.
- P4Death Cross Momentum Failure
Trip ifThe 200-day moving average slope remains below negative 5% for more than 90 days.