Quick Read – Citi’s Tyler Radke opened a positive catalyst watch on ORCL, calling its 36% year-over-year selloff a 4 to 5 standard deviation move. – Oracle’s $20 billion ATM equity program caps every rally with latent supply while the company burns negative $24 billion in free…
sh flow. – A $638 billion backlog, 404% multi-cloud growth, and the October investor day give Radke’s bull case real support but a complicated timeline. – Oracle (NYSE:ORCL) has been the loudest cautionary tale in software this summer, which is exactly why Citi’s Tyler Radke went on CNBC today to argue the selloff has gone too far. Radke, co-head of U.S. software equity research at the bank, opened a positive catalyst watch on Oracle and called the drawdown “a 4 to 5 standard deviation move” driven largely by technical factors
The stock closed at $148.87 on Wednesday, down 22.88% year to date and 35.71% below its price a year ago. Radke cited Oracle as down over 20% year to date and pacing for its first negative year in four. His argument rests on three claims: the selling is mechanical, the growth is real, and the valuation is cheap.
He describes Oracle as “growing revenue and earnings over 30% over the next few years” and trading at a mid-teens earnings multiple, which lines up with a forward P/E of 18x. The tension in his case is that he blames technical selling while acknowledging Oracle’s credit rating is teetering on the edge of investment grade. Those two things are not independent.