Let's talk about the popular Oracle Corporation (NYSE:ORCL). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$117 and falling to the lows of US$100. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Oracle's current trading price of US$105 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Oracle’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Oracle

What Is Oracle Worth?

According to our valuation model, Oracle seems to be fairly priced at around 3.9% below our intrinsic value, which means if you buy Oracle today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $109.76, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Oracle’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Oracle?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 53% over the next couple of years, the future seems bright for Oracle. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? ORCL’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on ORCL, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.