Oracle Rated as a Buy Amid Valuation Concerns

about 1 month ago

Parkev Tatevosian, CFA

"Still, even after those adjustments, Oracle stock looks undervalued at $179 a share compared to the intrinsic value of $29. Now, after applying a margin of safety, this undervaluation is not that extreme. So, I do have Oracle stock rated as a buy and I do think it's undervalued, but it's not all that much. It's not all that great of an investment considering the risk that you would be taking with Oracle stock right now."

The speaker highlights that despite Oracle's stock appearing undervalued at $179 compared to a much lower intrinsic value, the margin of safety is narrow. He explicitly rates Oracle as a buy but cautions about risks related to contract profitability and high spending, suggesting that while the stock has value, the potential rewards might be limited.

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