Signal Ledger LabSignal Ledger valuation · ORCL
Oracle Corp
What the shares are worth today on our research (management’s own targets for each business): every line valued at the end of FY2030, net debt rolled forward, then discounted back to Aug 31, 2026.
- Business value at FY2030
- $896B
- FY2030 revenue
- $226B
- FY2030 EPS · P/E
- $15.08 · 15×
- Discount rate (WACC · equity)
- 9.37% · 9.87%
Latest quarter in this research: Q1 FY2027
Reported Sep 10, 2026 for the quarter to Aug 31, 2026 (company release ↗). This valuation already reflects these results (researched Oct 23, 2026).
| Segment | Revenue | vs a year ago | Operating income | Margin |
|---|---|---|---|---|
| Cloud and software | $17.2B | +33% | $9.36B | 54.5% |
| Hardware | $0.77B | +16% | $0.45B | 58.4% |
| Services | $1.41B | +5% | $0.45B | 31.5% |
- Latest released quarter as of October 22, 2026; the existing model already uses the August 31 balance sheet and these reported revenues.
- GAAP segment profit excludes corporate costs, which are deducted once as a separate corporate business. Net income is before $0.081B preferred dividends; income available to common shareholders is $4.679B.
What each business is worth
| Business | Model | FY2030 revenue | Value today | Per share | 2030 multiple | Value from beyond FY2030 |
|---|---|---|---|---|---|---|
| Cloud infrastructure · OCI | Capacity (capex follows demand) | $166B | $449B | $148.63 | 6.8× EBITDA | 98% |
| Cloud applications · SaaS | Margin | $24B | $140B | $46.29 | 14.8× EBIT | 63% |
| Software licenses and support · database and applications | Margin | $24B | $179B | $59.09 | 8.5× EBIT | 46% |
| HardwareHardware and services | Margin | $3.8B | $31B | $10.24 | 13.2× EBIT | 60% |
| ServicesHardware and services | Margin | $8.3B | $32B | $10.56 | 14.4× EBIT | 62% |
| Company costsHead-office costs no segment carries, valued as one negative business | Cost line | — | −$264B | −$87.45 | — | 63% |
| All businesses | $226B | $567B | $187.35 |
Cloud infrastructure · OCI: does new capacity pay?
Each $1 of equipment earns 29.3% EBITDA a year against a 23.6% break-even. Every $1 of new annual revenue is worth $0.51 today after paying for its equipment.
Needs $159B of funding before it pays for itself; that lands in net debt.
From 2030 back to today
- Enterprise value at end of FY2030$896B
- Less net debt at FY2030$231B
- Equity value at FY2030$664B
- ÷ (1 + 9.87%)^3.8 years at the cost of equity$467B
- + dividends paid on the way, discounted$19B
This reconciliation checks the published Signal Ledger valuation against the net-debt path. The difference is 4.8%, inside our 5% tolerance.
From businesses to one share
- All businesses, valued today$567B
- − borrowings$125B
- − finance leases$9.2B
- − preferred and minority claims$5.4B
- + cash and short-term investments$37B
- ÷ diluted shares3.024B
- Signal Ledger valuation$153.35
Year by year to FY2030
| Fiscal year | Revenue | EBITDA | Capex | Free cash flow | Net debt at year end |
|---|---|---|---|---|---|
| FY2027part already reported | $90B | $43B | $89B | −$50B | $146B |
| FY2028 | $117B | $61B | $63B | −$6.2B | $165B |
| FY2029 | $159B | $89B | $163B | −$82B | $259B |
| FY2030 | $226B | $134B | $79B | $44B | $231B |
What must be true
- Cloud infrastructure · OCI grows revenue from $38.4B in FY2027 to $166.0B in FY2030 (4.3×).
- Cloud applications · SaaS grows revenue from $17.7B in FY2027 to $24.4B in FY2030 (1.4×).
- Software licenses and support · database and applications holds revenue roughly flat, from $24.4B in FY2027 to $23.8B in FY2030.
- Hardware and services grows revenue from $9.5B in FY2027 to $12.1B in FY2030 (1.3×).
- Cloud infrastructure · OCI lets its EBITDA margin slip from 71.8% to 70.2%.
- Cloud applications · SaaS raises its EBIT margin from 40.9% to 44.9%.
- Software licenses and support · database and applications holds its EBIT margin at 85.4%.
- Hardware raises its EBIT margin from 65.4% to 69.4%.
- Services raises its EBIT margin from 26.7% to 30.7%.
- The company spends $394.1B of capital expenditure through FY2030.
- Net debt peaks at $259.1B in FY2029 and stays financeable.
- Cloud infrastructure · OCI earns 29.3% EBITDA a year on each dollar of equipment, above the 23.6% it needs to cover depreciation and the cost of capital.
What the price implies
At our discount rate, the price assumes less than our research overall: one combination matching $125.54 is about $183.8B of FY2030 sales (growth of about 28.5% a year from FY2026) with 60.5% GAAP EBIT margin on margin-based lines and 70.2% EBITDA margin on capacity lines — versus $226.3B and 60.5% GAAP EBIT margin on margin-based lines and 70.2% EBITDA margin on capacity lines in our research.
At the research price of $125.54 (2026-10-23), the price asks less than our assumptions overall. These are operating requirements at that price, not additional valuations or forecasts.
If sales and margins changed together
Each row matches the same research price at our unchanged discount rate, by scaling every operating line's margin by one common factor. Sales cover margin and capacity lines only; other valuation lines stay fixed. Margins are revenue-weighted within each metric, before separately modeled corporate costs and eliminations. The conclusion uses the row at our research margins when sales alone can match the price, otherwise the solved row needing the least sales growth; this is a trade-off between growth and profitability, not a forecast.
| FY2030 sales factor | FY2030 sales | FY2026–30 CAGR | Required FY2030 margin | Requirement |
|---|---|---|---|---|
| 0.81×At research margins | $183.8B | 28.5% | 60.5% GAAP EBIT 70.2% EBITDA | Within margin guardrails |
| 1.50× | $339.5B | 49.8% | 54.5% GAAP EBIT 63.3% EBITDA | Within margin guardrails |
| 2.00× | $452.6B | 61.0% | 52.7% GAAP EBIT 61.2% EBITDA | Within margin guardrails |
| 3.00× | $678.9B | 78.2% | 50.8% GAAP EBIT 59.0% EBITDA | Within margin guardrails |
CAGR uses $67.4B of same-scope FY2026 sales from the published model or its sourced research base, over four fiscal years. “Within margin guardrails” checks numeric limits only, not commercial plausibility. Each line and year must stay at or below 50.0% GAAP EBIT and 100% EBITDA, or our research margin where that is higher; capacity EBIT uses the engine's equipment depreciation. Unsolved margins are not extrapolated.
- Implied discount rate
- 10.2%
- All-business FY2030 sales factor
- 0.81×
The WACC that makes model value equal the price, shifting WACC and cost of equity by the same amount. Model: 9.4% WACC · 9.9% cost of equity.
FY2030 revenue would need to reach $183.8B (model: $226.3B) across the margin and capacity businesses. FY1 stays fixed; the sales change ramps to FY2030 and stays at that factor thereafter.
If only one business changed
Businesses with margin or capacity revenue paths, ordered by value today. Revenue and margin are separate alternatives; these requirements are not added together.
Cloud infrastructure · OCI
- Revenue alone
- FY2030 revenue would need to reach $98.2B (model: $166B).
- Margin alone
FY2030 EBITDA margin would need to reach 66.8% (model: 70.2%).
Software licenses and support · database and applications
- Revenue alone
- FY2030 revenue would need to reach $9.9B (model: $23.8B).
- Margin alone
FY2030 EBIT margin would need to reach 45.2% (model: 85.4%).
Cloud applications · SaaS
- Revenue alone
- FY2030 revenue would need to reach $5.4B (model: $24.4B).
- Margin alone
FY2030 EBIT margin would need to reach 17.9% (model: 44.9%).
Hardware and services
- Revenue alone
- This business alone cannot get there within the search range.
- Margin alone
- This business alone cannot get there within the search range.
Mechanical requirements, not forecasts. The separate sales-only and single-business factors are searched from 0.1× to 6×; an unsolved comparison means this business alone cannot get there within those bounds. Single-business revenue changes apply from FY2 onward; margin changes scale the full EBIT or EBITDA margin path. Mixed groups show revenue-weighted EBIT and EBITDA margins separately. Requirements above 100% are not feasible margins. Joint rows instead search non-negative uniform margin factors only up to the EBIT/EBITDA guardrails; the entire margin path scales, including post-FY2030 convergence. Sales and margins change together only in that table. The rate search runs from the largest terminal growth rate plus 0.5 percentage points to 30% WACC.
The discount rate
- Cost of equity
- 9.87%
- WACC
- 9.37%
- 10-year Treasury · model / spot
- 3.87% · 5.13%
r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.20 after Blume adjustment × 5%, rounded to 0.01% (1bp)
methodology §4.5: market-weighted WACC + 1.000000 point build-out premium: 1pp × clamp(FY1 net debt increase / (2% × equity market value), 0, 1), not rounded
The model uses the recorded 5-year average Treasury yield. The spot yield is shown for context.
Every input, with its source
Show 39 inputs · reported, guidance and rule-based
| Input | Value | Basis | Why |
|---|---|---|---|
| Revenue FY2027Cloud infrastructure · OCI | $38.4B | Rule | target (methodology §4.2), growth 112.2% oracle.com ↗ |
| Revenue FY2030Cloud infrastructure · OCI | $166.0B | Guidance | target (methodology §4.2), growth 62.9% oracle.com ↗ |
| EBITDA margin FY2030Cloud infrastructure · OCI | 70.2% | Rule | linear path to 70.2% by FY2030 (company-disclosed contract EBITDA less 7 points of company cost) oracle.com ↗ |
| Equipment per $1 of revenue (k)Cloud infrastructure · OCI | 2.4 | Rule | methodology §4.4: in-service equipment + FY1 capex over FY2 revenue = 2.28, averaged with the contract 2.535 fool.com ↗ |
| Equipment lifeCloud infrastructure · OCI | 6 years | Reported | server life 6 years sec.gov ↗ |
| Capex FY2027Cloud infrastructure · OCI | $87.9B | Guidance | Midpoint of management's FY2027 gross capex guidance of $90B-$95B; this is before applying poolShare. Management also said net cash capex should not exceed $70B. ([fool.com](https://www.fool.com/earnings/call-transcripts/2026/09/11/oracle-orcl-q1-2027-earnings-call-transcript/?utm_source=openai)) × 0.95 pool share fool.com ↗ |
| Terminal growthCloud infrastructure · OCI | 3.0% | Rule | methodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2027Cloud applications · SaaS | $17.7B | Reported | hold moderate (methodology §4.2), growth 11.3% productLinesAnnual[member=orcl:CloudApplicationsMember].revenueB[0:1] |
| Revenue FY2030Cloud applications · SaaS | $24.4B | Reported | hold moderate (methodology §4.2), growth 11.3% productLinesAnnual[member=orcl:CloudApplicationsMember].revenueB[0:1] |
| EBIT margin FY2030Cloud applications · SaaS | 44.9% | Rule | linear path to 44.9% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 11.3% to FY2030; no cited expansion evidence) Valuation methodology · Read methodology ↗ |
| Maintenance capexCloud applications · SaaS | 2.0% | Rule | No line-specific maintenance capex disclosure; uses the default 2% of revenue. Valuation methodology · Read methodology ↗ |
| Terminal growthCloud applications · SaaS | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2027Software licenses and support · database and applications | $24.4B | Reported | hold decline (methodology §4.2), growth -0.7% productLinesAnnual[member=orcl:SoftwareLicenseMember].revenueB[0:1]; productLinesAnnual[member=orcl:SoftwareSupportMember].revenueB[0:1] |
| Revenue FY2030Software licenses and support · database and applications | $23.8B | Reported | hold decline (methodology §4.2), growth -0.7% productLinesAnnual[member=orcl:SoftwareLicenseMember].revenueB[0:1]; productLinesAnnual[member=orcl:SoftwareSupportMember].revenueB[0:1] |
| EBIT margin FY2030Software licenses and support · database and applications | 85.4% | Rule | linear path to 85.4% by FY2030 (declining line without a management target holds its latest margin) Valuation methodology · Read methodology ↗ |
| Maintenance capexSoftware licenses and support · database and applications | 2.0% | Rule | No line-specific maintenance capex disclosure; uses the default 2% of revenue. Valuation methodology · Read methodology ↗ |
| Terminal growthSoftware licenses and support · database and applications | -0.7% | Rule | methodology §4.2 terminal growth for a declining line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2027Hardware | $3.2B | Reported | hold moderate (methodology §4.2), growth 5.0% segmentsAnnual[member=orcl:HardwareBusinessMember].revenueB[0:1] |
| Revenue FY2030Hardware | $3.8B | Reported | hold moderate (methodology §4.2), growth 5.0% segmentsAnnual[member=orcl:HardwareBusinessMember].revenueB[0:1] |
| EBIT margin FY2030Hardware | 69.4% | Reported | linear path to 69.4% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 5.0% to FY2030; no cited expansion evidence) segmentsAnnual[member=orcl:HardwareBusinessMember].operatingIncomeB[0]; segmentsAnnual[member=orcl:HardwareBusinessMember].revenueB[0] |
| Maintenance capexHardware | 2.0% | Rule | No line-specific maintenance capex disclosure; uses the default 2% of revenue. Valuation methodology · Read methodology ↗ |
| Terminal growthHardware | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2027Services | $6.3B | Reported | hold moderate (methodology §4.2), growth 9.8% segmentsAnnual[member=orcl:ServicesBusinessMember].revenueB[0:1] |
| Revenue FY2030Services | $8.3B | Reported | hold moderate (methodology §4.2), growth 9.8% segmentsAnnual[member=orcl:ServicesBusinessMember].revenueB[0:1] |
| EBIT margin FY2030Services | 30.7% | Reported | linear path to 30.7% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 9.7% to FY2030; no cited expansion evidence) segmentsAnnual[member=orcl:ServicesBusinessMember].operatingIncomeB[0]; segmentsAnnual[member=orcl:ServicesBusinessMember].revenueB[0] |
| Maintenance capexServices | 2.0% | Rule | No line-specific maintenance capex disclosure; uses the default 2% of revenue. Valuation methodology · Read methodology ↗ |
| Terminal growthServices | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Share of revenue FY2027Company costs | 19.3% | Reported | trailing four quarters: consolidated operating income minus segment profit = −$16.747B; grows with the non-infrastructure lines' revenue; §4.3.2 G3 same-quarter TTM driver base $49.635B (2026-08-31, 2026-05-31, 2026-02-28, 2025-11-30), annual base $49.25600000000001B SEC XBRL 2026-08-31, 2026-05-31, 2026-02-28, 2025-11-30 |
| Share of revenue FY2034Company costs | 7.4% | Reported | trailing four quarters: consolidated operating income minus segment profit = −$16.747B; grows with the non-infrastructure lines' revenue; §4.3.2 G3 same-quarter TTM driver base $49.635B (2026-08-31, 2026-05-31, 2026-02-28, 2025-11-30), annual base $49.25600000000001B SEC XBRL 2026-08-31, 2026-05-31, 2026-02-28, 2025-11-30 |
| WACCDiscount rates | 9.37% | Rule | methodology §4.5: market-weighted WACC + 1.000000 point build-out premium: 1pp × clamp(FY1 net debt increase / (2% × equity market value), 0, 1), not rounded FRED DGS10 2021-10-20..2026-10-21 |
| Cost of equityDiscount rates | 9.87% | Rule | r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.20 after Blume adjustment × 5%, rounded to 0.01% (1bp) 60 monthly returns vs SPY, 2021-09..2026-09 (adjusted closes) |
| Tax rateDiscount rates | 15.1% | Reported | Latest reported GAAP effective tax rate was 15.1% for Q1 FY2027; no full-year effective tax-rate guidance was disclosed. ([investor.oracle.com](https://investor.oracle.com/investor-news/news-details/2026/Oracle-Announces-Q1-Results-Driven-by-Triple-Digit-Growth-in-Cloud-Infrastructure-Revenues/default.aspx)) investor.oracle.com ↗ |
| Cash and short-term investmentsBalance sheet | $37.1B | Reported | cash, cash equivalents and short-term investments us-gaap:CashAndCashEquivalentsAtCarryingValue + us-gaap:AvailableForSaleSecuritiesDebtSecuritiesCurrent · 0001193125-26-389274 (filed 2026-09-11) |
| BorrowingsBalance sheet | $125.3B | Reported | borrowings due within a year plus long-term borrowings us-gaap:NotesPayableCurrent · 0001193125-26-389274 + us-gaap:LongTermNotesAndLoans · 0001193125-26-389274 |
| Finance leasesBalance sheet | $9.2B | Reported | finance lease liabilities (capex-like; deducted once) us-gaap:FinanceLeaseLiability · 0001193125-26-389274 (filed 2026-09-11) |
| Preferred stockBalance sheet | $5.0B | Reported | preferred stock at carrying value (no liquidation preference tagged) us-gaap:PreferredStockValue · 0001193125-26-389274 (filed 2026-09-11) |
| Minority interestsBalance sheet | $0.4B | Reported | noncontrolling interests at book value us-gaap:MinorityInterest · 0001193125-26-389274 (filed 2026-09-11) |
| SharesBalance sheet | 3.024B | Reported | shares outstanding as of 2026-09-07 cover page of 10-Q 0001193125-26-389274 |
| Dividends per yearShareholders | $6.0B | Reported | Last four quarterly dividends were $0.50 per share each, totaling $2.00. × 3.024B shares investor.oracle.com ↗ |
Research notes
- share-count comparison: 3B quarter 2026-06-01..2026-08-31 · 0001193125-26-389274; point-in-time denominator retained
- unallocated company costs: $16.7B a year (23.3% of trailing revenue), growing with the non-infrastructure lines, valued as one negative business
- Cloud infrastructure · OCI: 1 quarter(s) of FY2027 already reported; counted as actuals
- cost of equity 9.87% (β 1.20 after Blume adjustment), WACC 9.4% incl. 1.000000-point build-out premium (§4.5 G2)
- §4.5 leverage: D/E 0.354, net debt/EBITDA 3.45, β_lev 1.041, β 1.200 → 1.200; D $134.52B, E $379.60B, cash $37.08B, base EBITDA $28.26B
- Cloud infrastructure · OCI: k 2.4 (calibrated 2.28, contract 2.535), life 6 years
- Cloud infrastructure · OCI: FY2030 margin set to 70.2% instead of 75.0% (company-disclosed contract EBITDA less 7 points of company cost)
- Hardware: FY2030 margin set to 69.4% instead of 65.4% (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 5.0% to FY2030; no cited expansion evidence)
- Services: FY2030 margin set to 30.7% instead of 26.7% (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 9.7% to FY2030; no cited expansion evidence)
- §4.5 G2: FY1 net debt increase $43.602365457119646B / (2% × equity market value $379.59981744000004B); build-out premium 1.000000pp, measured before premium
Signal Ledger research under one stated scenario — management's targets are delivered — not a forecast that they will be and not investment advice. The research desk (gpt-5.6-luna) gathers filings, guidance and targets; deterministic code applies the samepublished rules to every company and checks the result. Inputs may contain errors; follow the source links before relying on them. Read our valuation methodology →