Oracle Corporation (ORCL) Stock Valuation — PE Analysis
Software - Infrastructure · NYSE
Current Price
$184.31
PE Ratio (TTM)
31.0x
Intrinsic Value
$323.36
+43.0% margin of safety
COMPETITIVE MOAT
↑Dominant Cloud Infrastructure
Oracle's substantial investment in its cloud infrastructure, particularly for AI workloads, is creating a sticky ecosystem. Customers are increasingly reliant on its specialized hardware and services for demanding computations.
↑Enterprise Software Lock-in
Decades of deep integration into enterprise IT systems provide significant switching costs. Businesses are hesitant to disrupt critical operations by migrating away from Oracle's established database and application software.
↑Growing Backlog and AI Demand
A massive $553 billion backlog signals strong demand for Oracle's offerings, especially in the AI space. This sustained customer commitment reinforces its market position and future revenue streams.
INVESTMENT RISKS
↓High Debt-Funded AI Spending
Oracle's aggressive capital expenditure on AI infrastructure, funded by debt, raises concerns about financial sustainability. Increased leverage could strain profitability if AI growth falters.
↓AI Growth Rate Durability
Broader market worries about the sustainability of AI growth rates could impact Oracle's future revenue projections. A slowdown in AI adoption would directly affect its cloud expansion plans.
↓Competitive Cloud Landscape
The cloud market is intensely competitive, with established players and emerging threats. Oracle faces constant pressure to innovate and maintain its market share against rivals.
Base case
ORCL base case PE valuation
A base case PE valuation for ORCL estimates a fair value of about $323.36 per share, against a current price of $184.31. The model assumes 20.0% annual earnings growth, a 31x target PE multiple, and a 10% discount rate.
Intrinsic Value
$323.36
Margin of safety
+43.0%
Expected annual return
+11.9%
Base case assumptions: 20.0% annual earnings growth, 31x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-18.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ORCL PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Oracle Corporation respond.
Open PE Calculator for ORCLCompany Overview
Oracle Corporation, a global technology giant, provides a comprehensive suite of enterprise information technology solutions worldwide. A core part of its portfolio comprises cloud-based software-as-a-service (SaaS) applications, including the Oracle Fusion Cloud suite covering enterprise resource planning (ERP), enterprise performance management (EPM), supply chain and manufacturing management (SCM), and human capital management (HCM). This also extends to specialized offerings like Oracle Advertising, the NetSuite application suite, and Oracle Fusion solutions for Sales, Service, and Marketing. Beyond these, Oracle develops cloud solutions tailored for various specific industries, alongside traditional application licenses and comprehensive license support services. Furthermore, the company's robust cloud and licensing business is underpinned by its infrastructure technologies. These include the flagship Oracle Database, the widely adopted Java programming language, and various middleware components such as development tools. Its advanced cloud infrastructure provides compute, storage, and networking capabilities, complemented by innovative services like the Oracle Autonomous Database, MySQL HeatWave, Internet-of-Things (IoT) platforms, digital assistants, and blockchain technology. Oracle also offers a range of hardware products and associated software. This encompasses Oracle engineered systems, enterprise servers, storage solutions, and specialized hardware for particular industries. Additionally, it provides virtualization software, operating systems, management software, and related hardware support. Complementing its product lines, Oracle delivers expert consulting and dedicated customer services. The company employs a direct sales model, reaching businesses across diverse sectors, government bodies, and educational institutions globally, while also leveraging an extensive network of indirect channels. Established in 1977, Oracle Corporation maintains its corporate headquarters in Austin, Texas.
Financial Metrics — ORCL PE Stock Valuation Data
PE Ratio (TTM)
31.0x
PEG Ratio
0.94
Earnings Yield
3.22%
ROE (TTM)
50.4%
Revenue/Share (TTM)
$23.40
Dividend Yield
1.09%
Debt/Equity
3.63x
Frequently Asked Questions
What is the PE ratio of ORCL?
The trailing twelve-month PE ratio of ORCL reflects how much investors pay per dollar of Oracle Corporation's earnings. This metric is most useful when compared to Software - Infrastructure peers and the company's own historical range.
Is ORCL overvalued based on PE ratio?
ORCL's PE of 31.0x combined with a PEG ratio of 0.94 provides a growth-adjusted perspective. A PEG below 1.0 suggests ORCL may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Software - Infrastructure, a DCF analysis may be more appropriate.
How do I value ORCL stock using PE ratio?
To value Oracle Corporation using PE: (1) Compare the current PE (31.0x) against the Software - Infrastructure median to assess relative pricing, (2) check the PEG ratio (0.94) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of ORCL?
ORCL's PEG ratio is 0.94, calculated by dividing the PE ratio (31.0x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for ORCL stock valuation?
PE ratio gives a quick relative read — how ORCL is priced versus Software - Infrastructure peers. DCF provides an absolute value based on projected free cash flows. For ORCL, with a strong ROE of 50.4%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See ORCL DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Technology valuationsP/E and DCF value ORCL with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-18. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.