Oracle Corporation

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker Analyst Analyst Email
Stifel Nicolaus Brad R. Reback rebackb@stifel.com
Pacific Crest Securities-KBCM Brendan Barnicle bbarnicle@pacific-crest.com
Drexel Hamilton Brian J. White bwhite@drexelhamilton.com
Oppenheimer Brian Schwartz brian.schwartz@opco.com
Atlantic Equities Christopher Hickey c.hickey@atlantic-equities.com
Nomura Research Frederick Grieb frederick.grieb@nomura.com
DA Davidson Jack Andrews jandrews@dadco.com
William Blair Jason Ader jader@williamblair.com
BTIG Joel P. Fishbein jfishbein@btig.com
Jefferies John DiFucci jdifucci@jefferies.com
SunTrust Robinson Humphrey John Rizzuto john.rizzuto@suntrust.com
Deutsche Bank Research Karl Keirstead karl.keirstead@db.com
Daiwa Securities Co. Ltd. Kazuya Nishimura kazuya.nishimura@us.daiwacm.com
BMO Capital Markets Keith Bachman keith.bachman@bmo.com
Evercore ISI Kirk Materne kirk.materne@evercoreisi.com
Bernstein Research Mark L. Moerdler mark.moerdler@bernstein.com
Northland Securities Marshall Senk msenk@northlandcapitalmarkets.com
Raymond James Michael Turits michael.turits@raymondjames.com
JMP Securities Patrick Walravens pwalravens@jmpsecurities.com
Credit Suisse Philip Winslow philip.winslow@credit-suisse.com
Canaccord Genuity Richard Davis Jr. rdavis@canaccordgenuity.com
Societe Generale Richard Nguyen richard.nguyen@sgcib.com
Wunderlich Securities Rob Breza robbreza@wundernet.com
RBC Capital Markets Ross MacMillan ross.macMillan@rbccm.com
Wedbush Securities Steve Koenig steve.koenig@wedbush.com

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Primary Input Data

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Derived Input Data

Derived Input

Label

2015 Value

2016
Value

Equational Form
Net Operating Profit Less Adjusted Taxes NOPLAT  9,288 8,586 NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)
Free Cash Flow FCF 11,701 12,279 FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS
Tax Shield TS 285 374 TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income
Invested Capital IC 90,662 108,033 IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital
Return on Invested Capital ROIC 10.24% 7.95% ROIC\,=\,\frac { NOPLAT }{ IC }
Net Investment NetInv 7,635 19,663 NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation
Investment Rate IR 82.21% 229.01% IR\,=\,\frac {NetInv}{NOPLAT}
Weighted Average Cost of Capital
 WACCMarket 16.91% 14.21% WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)
 WACCBook  8.88%  8.04%
Enterprise value
 EVMarket 153,288 161,379 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook  145,338  156,801
Long-Run Growth
 g = IR x ROIC
   8.42%  18.20% Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
g = % \Delta GDP   2.50%   2.50%
Margin from Operations M  37.38%   35.41% M\,\,=\,\,\frac{EBIT}{SALES}
Depreciation/Amortization Rate D  16.68%   14.79% D\,\,=\,\,\frac{D+A}{EBITDA}

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form

Observed Value

Single-stage

multiple g solution

Two-stage valuation

model g solution
12/31/2015 12/31/2016 12/31/2015 12/31/2016 12/31/2015 12/31/2016

EV/SALES 

\frac {EV}{Sales} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)

 4.01  4.33  23.58%  26.91%  23.58%  20.82%

EV/EBITDA

\frac {EV}{EBITDA} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)

 8.94 10.41 23.58% 26.91% 23.58% 20.82%

EV/NOPLAT

\frac {EV}{NOPLAT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}

 16.50 18.80 23.58% 26.91% 23.58% 20.82%

EV/FCFOPS

\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

 13.10 13.14 23.58% 26.91% 23.58% 20.82%

EV/EBIT

\frac {EV}{EBIT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

 10.73 12.22 23.58% 26.91% 23.58% 20.82%

EV/IC

\frac {EV}{IC} \,= \,\frac{ROIC\,  -\,  g}{WACC\,-\,g}

 1.69 1.49 23.58% 26.91% 23.58% 20.82%

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