Oracle (ORCL) Stock Analysis
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fair value with margin of safety
Auto:The sector default values this firm on trailing-12-month free cash flow, but its TTM FCF is more than 50% below its own 5-year average — a dip, not a run rate. Using the basis the cash-flow cascade selected instead, so the fair value isn't anchored to a single depressed year.
Price is 54.2% below fair value — within the full 20% margin-of-safety range.
20% MoS — lower buffer, derived from Wide moat (durable competitive advantage).
Mixed fundamentals (5/8 pillars passed) — the fair-value estimate is less reliable. Consider a larger margin of safety.
8-pillar fundamentals screen
Mixed — do your homeworkSignals that the company may have a durable advantage
Sector: Technology
Automatic heuristics — always verify with the 10-K.
How the moat rating shifts the DCF — concrete parameters, not a vibe.
Wide-moat firms (durable pricing power, scale, network effects) still dominate their markets in 10 years. That supports a richer terminal multiple (+5) and a lower discount rate (−1pp), because the 10-year projection carries less execution risk. Pat Dorsey / Morningstar framework.
Qualitative checks a long-term investor would run
EPS volatility 46% — lower is better. Buffett prefers companies whose profits don't swing wildly year to year.
Share count changed by 8.1% over 5 years. Falling share count means each existing share owns more of the business.
Long-term debt equals 0.0 years of free cash flow. Below 4 is comfortable.
Average ROIC 258.1%. Above 15% is Buffett-grade — the company turns capital into profit efficiently.
Rule #1: 15 % over 10 years.
How consistent are revenue, EPS, equity, FCF and ROIC?
What growth is the price implying?
To justify the current price, the market implies will grow at 6.1% annually for 10 years.
0.50× historical (50.2% below)
Market pricing aligns with historical performance. The current price does not demand extraordinary growth.
Five independent methods triangulate a fair value band — no single number decides.
5 methods disagree widely: $44.54 – $275.38 (median $87.53). The model relies on assumptions that differ materially across methods.
Current price $126.16 sits 44.1% above the median — above the fair-value range.
3/5 years of positive FCF. Unbroken positive FCF is one of Buffett's strongest filters.
Informational — great compounders often reinvest instead of paying dividends.
Stock FAQ
Common questions about ORCL valuation, fair value, and analysis methodology.
Finrys estimates ORACLE CORP's (ORCL) fair value using a probability-weighted Discounted Cash Flow (DCF) model across three scenarios — bearish, base, and bullish — combined with a moat adjustment and Buffett-style quality gate. The current estimate is shown above on this page and updates automatically when new financial data is reported.
The verdict at the top of this page compares ORCL's current market price to Finrys' moat-adjusted fair value. If price exceeds fair value, the stock is flagged as potentially overvalued; if price is below fair value with a sufficient margin of safety, it is flagged as undervalued. The valuation range chart shows the spread across DCF, reverse DCF, and multiples-based estimates.
ORACLE CORP's DCF is calculated by projecting future free cash flows over 10 years and discounting them to present value at a 10% discount rate. Finrys uses three growth-rate scenarios (worst, base, best) probability-weighted into one fair value, then applies a moat-based premium or discount based on competitive advantage signals.
The valuation range chart triangulates ORCL's fair value against sector multiples (P/E, EV/EBITDA) so you can see where it sits versus comparable companies. The Buffett checklist additionally scores ORCL on 10 quality criteria — return on capital, debt levels, margin stability — that value investors use to compare durability across peers.
Compare against other S&P 500 stocks with full DCF and moat analysis.
