Oracle Sets Sights on $65 Billion in Revenue by Fiscal 2026; Shares Fairly Valued

On Oct. 20, Oracle hosted a financial analyst day at its larger CloudWorld event. At the event, the company revealed far-reaching fiscal 2026 expectations. While we like the aggressive goal, we think $65 billion in organic revenue by fiscal 2026 will be a tough ask, given the legacy-related headwinds we believe Oracle faces. We will continue to closely monitor how Oracle weathers the mass shift from legacy systems to the cloud, which ultimately determines whether the firm can cross $65 billion on the top line in several years. On the other hand, management’s target of non-GAAP operating margins of 45% by fiscal 2026 seemed very realistic to us; we continue to expect Oracle to reach 47% by fiscal 2026. Margin bridges revealed during the day gave us further confidence that 47% can be reached. All considered, we are maintaining our $67 fair value estimate and believe the shares are fairly valued.