We find Oracle to be very overvalued versus Lockheed Martin. Here are the factors we considered:
P/S Ratio
ORCL's P/S multiple of 4.6x is
significantly higher than the figure of 1.5x for LMT
Revenue Growth
Over the last twelve months, Oracle has seen revenues change by -0.4% -
meaningfully lower than the figure of 10.1% for Lockheed MartinIn the twelve-month period before that, revenues for Oracle had changed by 0.3% -
lower than the 9.7% change for Lockheed Martin
Operating Margin
Oracle's operating margin was 37% for the most recent twelve-month period, which is
much higher than Lockheed Martin's operating margin of 13.2%Over the last twelve months, the operating margin for Oracle changed by 1 pp (percentage points) -
better than the change of -0.9 pp for Lockheed MartinIn the twelve-month period before that, the operating margin for Oracle had changed by -0.9 pp -
worse than the change of 0.2 pp for Lockheed Martin over the same period
Note: ORCL reports its results on a fiscal year ending 5/31
Oracle Lockheed Martin Valuation: Current Market Cap $183 Bil $95 Bil Current P/S Multiple 4.6x 1.5xOracle significantly higher Revenues: Total Revenue (LTM) $39 Bil $64 Bil LTM Revenue Growth (Current) -0.4% 10%Oracle meaningfully lower LTM Revenue Growth (Year-ago) 0.3% 9.7%Oracle lower Operating Income/Margin: Operating Income (LTM) $15 Bil $8.5 Bil Operating Margin (LTM) 37% 13%Oracle much higher LTM Margin Change (Current) 1 pp -0.9 ppSimilar for both companies LTM Margin Change (Year-ago) -0.9 pp 0.2 ppSimilar for both companies