ORCL
Oracle Corporation
Technology · Software - Infrastructure · United States · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Strong growth and profitability factors — including 17.3% revenue growth, 37.3% net income growth, a 30.6% operating margin, and a 25.4% net margin — provided meaningful positive contributions to the 65.0/100 composite score.
- Consistent quarterly momentum across all four FY2026 quarters in both revenue and operating income added further support to the composite.
- Elevated leverage (debt-to-equity of 3.05) and limited interest coverage (4.5) weighed on the financial health factor, and the theme assignment scored zero, both of which constrained the total score and contributed to the High risk rating.
Why Not Higher
- The financial health factor was penalized by a debt-to-equity ratio of 3.05 and interest coverage of only 4.5, reflecting a leveraged balance sheet that introduces risk and pulled the composite score well below the midpoint for that factor.
- Oracle's assignment to three prominent macro themes — AI Infrastructure, Data Centers & Cloud Infrastructure, and Enterprise AI Software — did not translate into any score contribution under the model's current methodology, limiting the composite total.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2025's $57,399,000,000 to FY2026's $67,357,000,000, a gain of +17.3%. Net income rose +37.3% from FY2025 to FY2026, and diluted EPS increased +34.3% from $4.34 in FY2025 to $5.83 in FY2026.
The model rewarded Oracle's broad-based acceleration across revenue, earnings, and per-share metrics, with bottom-line growth substantially outpacing top-line growth, signaling improving operating leverage.
In FY2026, Oracle posted an operating margin of 30.6%, a net margin of 25.4%, and a return on assets of 6.5%.
The model rewarded the combination of a high operating margin and a net margin above 25%, reflecting efficient conversion of revenue to profit, while the 6.5% return on assets indicates meaningful earnings generation relative to the company's asset base.
Oracle's debt-to-equity ratio in FY2026 stood at 3.05, and interest coverage (operating income divided by interest expense) was 4.5 in FY2026.
The model penalized the elevated leverage reflected in a debt-to-equity ratio of 3.05, and the interest coverage of 4.5 in FY2026, while not critically low, leaves limited buffer, together pulling the financial health score well below the midpoint.
Revenue rose sequentially each quarter from $14,926,000,000 in 2026Q1 to $16,058,000,000 in 2026Q2, $17,190,000,000 in 2026Q3, and $19,183,000,000 in 2026Q4. Operating income followed the same unbroken upward path, climbing from $4,277,000,000 in 2026Q1 to $6,134,000,000 in 2026Q4.
The model rewarded the consistent quarter-over-quarter acceleration in both revenue and operating income across all four reported quarters, signaling sustained business momentum rather than a one-period spike.
Oracle has grown dividends per share from $1.36 in FY2023 to $1.60 in FY2024, $1.70 in FY2025, and $2.00 in FY2026, while maintaining a dividend payout ratio of 33.9% of net income in FY2026.
The model credited the consistent multi-year dividend growth trajectory and a payout ratio that is moderate enough to suggest the dividend is well-covered by earnings, supporting both income reliability and room for future increases.
Oracle is assigned to the macro themes of AI Infrastructure, Data Centers & Cloud Infrastructure, and Enterprise AI Software.
Although Oracle carries assignments across three high-profile macro themes, the sub-score of 0.0 indicates that this theme assignment did not translate into score contribution under the model's current methodology.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Oracle delivered strong FY2026 results, with revenue rising 17.3% to $67.4 billion and net income growing 37.3%, reflecting meaningful operating leverage as bottom-line growth substantially outpaced top-line growth. Profitability metrics were robust, with a 30.6% operating margin and a 25.4% net margin in FY2026. Quarterly momentum was unbroken, with revenue climbing from $14.9 billion in Q1 to $19.2 billion in Q4 and operating income following the same upward path. The primary structural concern is elevated financial leverage, with a debt-to-equity ratio of 3.05 and interest coverage of 4.5, which together pulled the composite score to 65.0/100 and warranted a High risk rating.
Plain English
Oracle is growing fast and making good profits, but it carries a lot of debt relative to its equity, which makes it riskier than it might otherwise appear — that tension is why it scores 65 out of 100 and is labeled a Research Candidate rather than a stronger conviction pick.
Bull Case vs. Bear Case
Bull Case
- Revenue accelerated every single quarter in FY2026, rising from $14.9 billion in Q1 to $19.2 billion in Q4, and operating income climbed in lockstep from $4.3 billion to $6.1 billion, signaling sustained and broadening business momentum.
- Net income grew 37.3% and diluted EPS rose 34.3% to $5.83 in FY2026, substantially outpacing the 17.3% revenue gain and demonstrating improving operating leverage.
- Oracle has grown its dividend per share every year from $1.36 in FY2023 to $2.00 in FY2026, while keeping the payout ratio at a moderate 33.9% of net income, suggesting the dividend is well-covered and has room to grow further.
Bear Case
- Oracle's debt-to-equity ratio of 3.05 in FY2026 reflects elevated financial leverage that introduces meaningful balance sheet risk, particularly in a rising-rate environment.
- Interest coverage of 4.5 in FY2026 leaves a limited buffer; a meaningful decline in operating income could quickly compress the margin of safety for debt service.
- Despite being assigned to three high-profile macro themes — AI Infrastructure, Data Centers & Cloud Infrastructure, and Enterprise AI Software — the theme factor contributed zero to the composite score under the model's current methodology, indicating that thematic positioning alone did not translate into measurable scoring benefit.
What Could Change the Picture
Bullish Triggers
- A sustained reduction in Oracle's debt-to-equity ratio, bringing leverage closer to industry norms, would materially improve the financial health score and reduce the primary structural risk flagged in this report.
- Continued quarter-over-quarter acceleration in revenue and operating income beyond the FY2026 trajectory would reinforce the momentum signal and strengthen the overall investment case.
Bearish Triggers
- A reversal in the unbroken quarterly revenue or operating income growth trend — for example, a sequential decline in any upcoming quarter — would undermine the momentum thesis that currently supports the score.
- Any increase in interest expense or decline in operating income that pushes interest coverage materially below 4.5 would heighten concerns about Oracle's ability to comfortably service its debt load.
Risk Profile
High RiskThe primary risk is Oracle's elevated financial leverage, with a debt-to-equity ratio of 3.05 and interest coverage of 4.5 in FY2026, leaving a limited buffer if operating income were to decline. While quarterly momentum has been consistently positive — with revenue and operating income rising every quarter through FY2026 — any reversal in that trend would amplify the balance sheet risk and justify the High risk rating.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.