Oracle Shares Have Outperformed Year To Date; Can The Momentum Continue After The Q4 Print?

Shares of Oracle Corporation ORCL are higher by 20 percent year-to-date, which begs the question: can the outperformance continue moving forward?

BTIG's Joel Fishbein thinks there is room for further upside as he maintained a Buy rating on Oracle's stock with a $47 price target.

Oracle is scheduled to report its fiscal fourth-quarter earnings after Wednesday's close. The company is expected to report upside to the Street's consensus estimate of $10.46 billion in revenue and earnings per share of $0.78, Fishbein stated. The analyst's checks also found that customers are "more satisfied than ever" with Oracle Cloud Application products while at the same time it's seeing better win rates and renewals.

Oracle also has an agreement to move thousands of AT&T Inc. T's large scale internal databases to its Cloud Infrastructure and expectations heading into the quarter is that this will prove to be "the first of many" deals, the analyst added.

As a whole, Oracle's pipeline remains "healthy" and "strong," especially NetSuite which is likely seeing an acceleration in bookings.

But there is one aspect of concern that investors should be aware of, Fishbein concluded. Oracle is transitioning its cloud sales model into a "low touch, lower-cost, high-velocity sales model" which presents the possibility for execution risk.

Nevertheless, a strong earnings report will help sustain the stock's positive momentum and the set up for the first fiscal quarter of 2018 remains favorable with the potential for accelerating and EPS growth.

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