Trend

QS Research · Michael Burry's Scion Capital analyst template · 2006

ORACLE CORP (ORCL)

As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data

Conclusion: WATCH

Conviction low · base case +0% · downside -15% · upside +32%

This is a SECULAR TTM valuation, not a cycle average: at $116.10 the market cap is $351.06B and EV $443.52B on TTM EBITDA $33.94B and net income to common $18.74B, giving 13.1x EV/EBITDA and 18.7x P/E. Base case: $33.94B TTM EBITDA x 13.1x = $444.6B EV, less $92.46B net debt = $352.2B equity, +0.3% versus $351.06B; downside at FY2026 EBITDA of $29.90B ($20.61B operating income + $7.62B depreciation + $1.67B amortization) x 13.1x = $391.7B EV, less $92.46B = $299.2B, -14.8%; upside at FY2027 revenue of at least $90B x TTM EBITDA margin 47.3% = $42.6B EBITDA x 13.1x = $557.5B EV, less $92.46B = $465.1B, +32.5%. The market is not missing the operating momentum -- Q1 FY2027 revenue +30%, cloud +62%, RPO $664B, FY2027 guide at least $90B revenue and $8.10 non-GAAP EPS -- it is discounting the funding side: TTM FCF -$28.72B, capex $75.66B, $92.46B net debt and $34.62B of leases outside EV. The bad news may be temporary if FCF inflects in late FY2028/FY2029, but that is not yet evidence; with base case near flat and the long rule requiring +30% base, this is a watch, not a long or short.

Key numbers

  • Share price: $116.10
  • Market cap: $351.06B
  • Latest financial period: TTM to Aug 31, 2026
  • Revenue (TTM): $71.78B
  • EV / EBITDA (TTM): 13.1x
  • P/E (TTM): 18.7x
  • Price / book: 5.68x

The 15 boxes

  1. ✓ 1. Long-form business notes

    Oracle is a three-business company (cloud and software, hardware, services), each a single operating segment, and the cloud-and-license business was renamed cloud and software between the FY2021 and FY2026 annual reports. Over that span revenue went from $40.48B (FY2021) to $67.36B (FY2026) and operating income from $15.21B to $20.61B, with cloud rising to 51% of total revenues in fiscal 2026 from 37% in fiscal 2024. The mix has shifted inside cloud as well: cloud infrastructure was 53% of total cloud revenues in fiscal 2026 versus 35% in fiscal 2024, while cloud applications fell to 47% from 65%. The newest year is capital-intensive — capex of $55.66B against $31.98B of operating cash flow in FY2026 — and buybacks have collapsed from $20.93B in FY2021 to $95.0M in FY2026.

  2. ✓ 2. Competitive advantage

    Oracle has real scale and subscription switching costs — revenue rose every year from $40.48B (FY2021) to $67.36B (FY2026) and operating income from $15.21B to $20.61B — but the FY2026 10-K describes competition as "intense" in every part of the business, against the largest cloud and software firms in the world, and explicitly cites low barriers to entry in many segments. The advantage is currently being bought: FY2026 capex of $55.66B ran well above operating cash flow of $31.98B, and OCI growth depends on third-party data-center leases and chip supply rather than on an owned, hard-to-replicate asset base. Evidence of a durable moat is therefore mixed: renewals and ratable subscriptions support it, the cost and capacity side does not.

  3. ✓ 3. 10-Q takeaways

    Q1 FY2027 (quarter ended Aug. 31, 2026) shows revenues up 30% to $19.345B, led by cloud infrastructure up 121% to $7.388B, with GAAP operating margin at 35% and non-GAAP at 42%. GAAP net income available to common was $4.679B and diluted EPS $1.56; operating cash flow was $23B but free cash flow was negative $5B on cloud-infrastructure investment. The earnings release gave numeric Q2 FY2027 and full-FY2027 guidance, and RPO rose to $664B; the 10-Q risk-factor section points back to the FY2026 10-K, while the computed 10-K risk-factor diff identifies 65 new or rewritten paragraphs.

  4. ✓ 4. Corporate governance

    Filled; members read this box.

  5. ✓ 5. Overview of the prior 3 years of 8-K filings

    Filled; members read this box.

  6. ✓ 6. Other significant filings

    Filled; members read this box.

  7. ✓ 7. Chronology of significant news and events

    Filled; members read this box.

  8. ✓ 8. Comparables valuation interpretation

    Filled; members read this box.

  9. ✓ 9. Insider trading interpretation

    Filled; members read this box.

  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary

    Filled; members read this box.

  14. ✓ 14. Current price suppression and potential catalysts

    Filled; members read this box.

  15. ✓ 15. Conclusions

    The call above.

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