Bore Family Office
Valuation Report — Oracle Corporation (ORCL) • March 10, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 8.50% • Current Price: $162.50
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Oracle Corporation (NYSE: ORCL) is one of the world's largest enterprise software and cloud infrastructure companies, with TTM revenue of ~$61B growing toward $67B in FY2026 and a raised FY2027 target of $90B. Founded in 1977 by Larry Ellison, Oracle dominates enterprise database software and has executed a successful pivot to cloud computing — particularly AI cloud infrastructure (OCI).
Oracle operates three segments: Cloud Infrastructure (IaaS / OCI) — the fastest-growing segment, +84% in Q3 FY2026, driven by AI training and inference workloads; Cloud Applications (SaaS) — Fusion ERP, NetSuite, HCM, growing ~13%; and On-Premise Software Licenses & Support — legacy, ~3% growth.
Q3 FY2026 blowout (reported March 10, 2026): Total revenue $17.2B (+22%), cloud revenue $8.9B (+44%), IaaS revenue $4.9B (+84%), non-GAAP EPS $1.79 (+21%). Remaining Performance Obligations (RPO) reached $553B — up 325% YoY and +$29B sequentially. This is the most critical number: it represents signed, contracted AI cloud backlog, primarily from hyperscalers and sovereign AI customers. Oracle guided Q4 revenue +19-21% and FY27 total revenue to $90B (raised from prior estimates).
Capital structure: Oracle is spending ~$50B in capex in FY2026 to build GPU clusters and data centers to meet demand. It raised $30B in debt/equity in February 2026 to fund this. Near-term FCF is suppressed; the bet is that the $553B RPO converts to cash over the next 5-7 years.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|
| Cloud Infrastructure (IaaS / OCI) | — | — | +84.0% | 35.0% | — |
| Cloud Applications (SaaS) | — | — | +13.0% | 40.0% | — |
| Software Licenses & Support | — | — | +3.0% | 85.0% | — |
| Hardware & Services | — | — | +2.0% | 20.0% | — |
📊 Financial Snapshot
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|
| Revenue ($M) | — | — | — | — | — |
| EBITDA ($M) | $18,129 | $14,048 | $19,201 | $21,492 | $23,852 |
| Operating Income ($M) | — | — | — | — | — |
| Net Income ($M) | — | — | — | — | — |
| EPS (diluted) | $4.55 | $2.41 | $3.07 | $3.71 | $4.34 |
| Free Cash Flow ($M) | $13,752 | $5,028 | $8,470 | $11,807 | $-394 |
| Annual DPS | $1.040 | $1.280 | $1.440 | $1.600 | $1.800 |
| Total Debt ($M) | — | — | — | — | — |
| Rev YoY Growth | — | — | — | — | — |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|
| Risk-Free Rate (Rf) | 4.30% | 10-yr US Treasury yield |
| Beta (β) | 1.650 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 13.38% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 4.20% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 3.70% | × (1 − 12%) |
| Weight Equity (We) | 83.0% | Mkt cap $0.0B |
| Weight Debt (Wd) | 17.0% | Gross debt $0.0B |
| WACC | 8.50% | DCF discount rate |
📈 DCF Scenarios
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|
| 🔴 Bear | 12.0% | 6.0% | 2.5% | 8.50% | $128 | ▼21.0% |
| 📊 Base | 20.0% | 10.0% | 3.0% | 8.50% | $239 | ▲47.2% |
| 🚀 Bull | 28.0% | 15.0% | 3.5% | 8.50% | $444 | ▲173.3% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 12.0% | Stage 2: 6.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $17.92B | $16.52B | $16.52B |
| Year 2 | Stage 1 | $20.07B | $17.05B | $33.57B |
| Year 3 | Stage 1 | $22.48B | $17.60B | $51.16B |
| Year 4 | Stage 1 | $25.18B | $18.17B | $69.33B |
| Year 5 | Stage 1 | $28.20B | $18.75B | $88.08B |
| Year 6 | Stage 2 | $29.89B | $18.32B | $106.40B |
| Year 7 | Stage 2 | $31.68B | $17.90B | $124.30B |
| Year 8 | Stage 2 | $33.58B | $17.49B | $141.79B |
| Year 9 | Stage 2 | $35.60B | $17.08B | $158.87B |
| Year 10 | Stage 2 | $37.73B | $16.69B | $175.56B |
| Terminal | — | TV=$644.6B | PV(TV)=$285.1B (62% of EV) | EV=$460.7B |
Base Scenario
Stage 1: 20.0% | Stage 2: 10.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $19.20B | $17.70B | $17.70B |
| Year 2 | Stage 1 | $23.04B | $19.57B | $37.27B |
| Year 3 | Stage 1 | $27.65B | $21.65B | $58.91B |
| Year 4 | Stage 1 | $33.18B | $23.94B | $82.85B |
| Year 5 | Stage 1 | $39.81B | $26.48B | $109.33B |
| Year 6 | Stage 2 | $43.79B | $26.84B | $136.17B |
| Year 7 | Stage 2 | $48.17B | $27.21B | $163.39B |
| Year 8 | Stage 2 | $52.99B | $27.59B | $190.98B |
| Year 9 | Stage 2 | $58.29B | $27.97B | $218.95B |
| Year 10 | Stage 2 | $64.12B | $28.36B | $247.31B |
| Terminal | — | TV=$1200.8B | PV(TV)=$531.1B (68% of EV) | EV=$778.4B |
Bull Scenario
Stage 1: 28.0% | Stage 2: 15.0% | Terminal: 3.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $20.48B | $18.88B | $18.88B |
| Year 2 | Stage 1 | $26.21B | $22.27B | $41.14B |
| Year 3 | Stage 1 | $33.55B | $26.27B | $67.41B |
| Year 4 | Stage 1 | $42.95B | $30.99B | $98.40B |
| Year 5 | Stage 1 | $54.98B | $36.56B | $134.97B |
| Year 6 | Stage 2 | $63.22B | $38.75B | $173.72B |
| Year 7 | Stage 2 | $72.71B | $41.07B | $214.79B |
| Year 8 | Stage 2 | $83.61B | $43.53B | $258.32B |
| Year 9 | Stage 2 | $96.15B | $46.14B | $304.47B |
| Year 10 | Stage 2 | $110.58B | $48.91B | $353.37B |
| Terminal | — | TV=$2288.9B | PV(TV)=$1012.4B (74% of EV) | EV=$1365.7B |
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|
| 6.5% | $306 | $334 | $369 | $415 | $475 |
| 7.0% | $271 | $293 | $320 | $354 | $398 |
| 7.5% | $242 | $260 | $281 | $307 | $340 |
| 8.0% | $218 | $232 | $249 | $270 | $295 |
| 8.5% | $197 | $209 | $223 | $239 | $259 |
| 9.0% | $179 | $189 | $201 | $214 | $229 |
| 9.5% | $164 | $172 | $182 | $192 | $205 |
| 10.0% | $150 | $157 | $165 | $174 | $185 |
| 10.5% | $138 | $144 | $151 | $158 | $167 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E (fwd) | EV/Rev | FCF Yield | Rev Growth | Cloud RPO |
|---|
| Oracle | ORCL | 19.9x | 7.5x | 2.4% | 22% | $553B |
| Microsoft | MSFT | 30.0x | 12.0x | 2.5% | 13% | N/D |
| Amazon (AWS) | AMZN | 35.0x | 3.5x | 3.8% | 11% | N/D |
| Salesforce | CRM | 27.0x | 7.0x | 3.5% | 9% | $63B |
| ServiceNow | NOW | 50.0x | 15.0x | 1.5% | 22% | N/D |
| SAP | SAP | 30.0x | 6.0x | 2.0% | 10% | N/D |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|
| Annual DPS | $2.000 |
| Current Yield | 1.23% |
| Consecutive Growth Years | 12 |
| 1-yr DPS CAGR | +11.1% |
| 3-yr DPS CAGR | +11.7% |
| 5-yr DPS CAGR | +14.0% |
| 10-yr DPS CAGR | +20.0% |
| Payout Ratio (DPS/EPS) | 28.0% |
| FCF Payout Ratio | 5.0% |
| Sustainability Verdict | Safe — low payout ratio; dividend is a rounding error vs capex spend |
Oracle has grown its dividend consistently for 12+ years at ~12-14% CAGR. The 1.2% yield is modest — this is a growth story, not an income story. The dividend is covered many times over by earnings. At $50B capex, reported FCF is temporarily suppressed but normalized FCF (OCF minus steady-state capex) supports the payout comfortably. Expect continued ~12-15% annual dividend growth.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
| 2024 | $3.71 | — | — | — | Actual |
| 2025 | $4.34 | — | — | — | Actual |
| 2026 | $6.63 | $7.52 | $7.96 | 48 | Estimate |
| 2027 | $5.75 | $8.07 | $8.81 | 48 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
| 2024 | $53.0B | — | — | — | Actual |
| 2025 | $57.4B | — | — | — | Actual |
| 2026 | $64.8B | $68.3B | $71.0B | 48 | Estimate |
| 2027 | $77.1B | $88.4B | $94.1B | 48 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $276.00 | Range $160–$400
| Analyst | Firm | Rating | PT | Upside |
|---|
| Brent Thill | Jefferies | Strong Buy | $320 | +96.9% |
| Brad Zelnick | Deutsche Bank | Strong Buy | $300 | +84.6% |
| Raimo Lenschow | Barclays | Buy | $230 | +41.5% |
| Patrick Colville | Scotiabank | Buy | $215 | +32.3% |
| Rob Oliver | Baird | Buy | $200 | +23.1% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|
| Q3 FY2026 | $1.79 vs $1.65 | +$0.14 ✅ | $17.2B vs $16.0B | +$1.2B ✅ | Q4 rev +19-21%; FY27 $90B raised |
| Q2 FY2026 | $1.47 vs $1.41 | +$0.06 ✅ | $14.1B vs $13.8B | +$0.3B ✅ | FY26 $67B maintained |
| Q1 FY2026 | $1.39 vs $1.31 | +$0.08 ✅ | $13.7B vs $13.5B | +$0.2B ✅ | — |
| Q4 FY2025 | $1.70 vs $1.63 | +$0.07 ✅ | $15.9B vs $15.7B | +$0.2B ✅ | — |
(e) Confidence Band Commentary
33 analysts covering ORCL. Consensus Buy, avg PT $276 — that's +70% from today's post-earnings $162.50 AH price. The wide PT range ($160-$400) reflects genuine bifurcation: Bears see heavy capex and debt risk; Bulls focus on the $553B RPO as a multi-year revenue guarantee. Note: many analyst PTs were set BEFORE tonight's Q3 blowout — expect upward PT revisions in coming days. Baird's $200 PT (vs. $300 prior) stands out as an outlier cut that seems to have been made before these results.
💡 Investment Thesis
Tonight's report changes the story. Oracle just reported its best quarter in 15 years — Q3 FY2026 revenue +22%, IaaS +84%, non-GAAP EPS +21%. But the number that matters most is the $553B in Remaining Performance Obligations (RPO) — up 325% year-over-year. That's not a forecast; that's signed contracts. Oracle has essentially sold out its cloud capacity for the next 5+ years.
The bear case: $50B capex in FY2026 is enormous — Oracle has to spend the money before it earns it. Net debt is ~$93B. If AI demand disappoints or GPU deployment slips, the FCF picture gets ugly. The stock is up 60%+ from lows and trades at 20x forward earnings — not cheap if growth stalls.
The bull case: $553B RPO converting at even 60% efficiency over 7 years = ~$47B/yr of contracted cloud revenue by 2032, versus $8.9B today. Add legacy software support (~$21B/yr at 85% margins), and Oracle becomes a $90-100B revenue, $40-45B EBITDA business. At any reasonable multiple, that's $200-300/share. The $90B FY2027 guidance raised tonight is not a stretch — it's already in the backlog.
My take: Strong Buy on the thesis; the entry point after tonight's 9% jump is not ideal. I'd buy a starter position at $155-165 and add aggressively on any pullback to $130-140. The $553B RPO makes this one of the most de-risked large-cap growth stories in the market right now. The capex cycle peaks in FY2026-27 and FCF should normalize dramatically by FY2028 as the $553B starts converting. This is a 3-5 year hold, not a trade.
⚖️ DCF Verdict: Hold — Oracle Corporation (ORCL)
Current price: $162.50 | Analyst Avg PT: $215.00
| Tier | Price | Action |
|---|
| Tier 1 — Starter | ≤$220 | Begin position |
| Tier 2 — Add | ≤$184 | Add on weakness |
| Tier 3 — Full | ≤$135 | Full allocation |
| Sell Alert | ≥$377 | Above fair value — consider trimming |
Strong conviction Buy on the RPO thesis. $553B backlog is multi-year revenue guarantee. Entry here ($162 AH) is acceptable; add aggressively on pullback to $130-140. 3-5 year hold.
Bore Family Office • Analysis generated by Lurch • Not investment advice.
