DCF Studio

    ORCL · NYQ · Technology

    Oracle Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 396.54

    Market price

    USD 119.22

    Implied upside

    +232.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-05-31

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 37.5% of revenue against depreciation of 12.1%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 396.54+232.6%
    Exit multiple
    USD 636.51+433.9%
    Market price
    USD 119.22

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -0bn78bn156bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 90.4bnUSD 131.9bnUSD 185.3bnUSD 250.3bnUSD 324.5bnUSD 403.1bnUSD 478.8bnUSD 542.8bnUSD 585.8bnUSD 600.5bn+23.4%
    EBITUSD 27.7bnUSD 40.5bnUSD 56.8bnUSD 76.8bnUSD 99.5bnUSD 123.6bnUSD 146.9bnUSD 166.5bnUSD 179.7bnUSD 184.2bn+23.4%
    NOPATUSD 24.5bnUSD 35.8bnUSD 50.3bnUSD 68.0bnUSD 88.1bnUSD 109.4bnUSD 130.0bnUSD 147.4bnUSD 159.0bnUSD 163.0bn+23.4%
    Add depreciation & amortisationUSD 10.9bnUSD 16.0bnUSD 22.4bnUSD 30.3bnUSD 39.2bnUSD 48.7bnUSD 57.9bnUSD 65.6bnUSD 70.8bnUSD 72.6bn+23.4%
    Less capital expenditureUSD -33.9bnUSD -45.9bnUSD -59.4bnUSD -73.4bnUSD -86.3bnUSD -96.2bnUSD -101.3bnUSD -100.0bnUSD -92.0bnUSD -77.9bn+9.7%
    Capex, % of revenue37.5%34.8%32.0%29.3%26.6%23.9%21.2%18.4%15.7%13.0%-
    Less increase in working capitalUSD -1.9bnUSD -3.4bnUSD -4.4bnUSD -5.3bnUSD -6.1bnUSD -6.5bnUSD -6.2bnUSD -5.3bnUSD -3.5bnUSD -1.2bn-4.9%
    Free cashflow to firmUSD -310.2mUSD 2.5bnUSD 9.0bnUSD 19.5bnUSD 34.9bnUSD 55.5bnUSD 80.4bnUSD 107.7bnUSD 134.4bnUSD 156.5bn-
    Discount factor0.95600.87360.79840.72960.66670.60930.55680.50890.46500.4250-
    Present valueUSD -296.5mUSD 2.2bnUSD 7.1bnUSD 14.2bnUSD 23.3bnUSD 33.8bnUSD 44.8bnUSD 54.8bnUSD 62.5bnUSD 66.5bn-
    Present Value Of The ForecastUSD 309.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.521Reported 1.778, pulled toward 1.0 (Blume)
    Cost of equity11.33%Risk-free + beta x equity risk premium
    Cost of debt5.67%Risk-free + 78bp, the spread for a A rating at 4.9x interest cover. Book interest / average debt was lower, at 3.5%.
    Market capitalisationUSD 361.4bn69.8% of capital
    Total debtUSD 156.2bn30.2% of capital, book value as a proxy
    Tax rate11.5%Effective, capped at statutory
    WACC9.43%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 396.54

    76% of EV

    Forecast FCFF, final year
    USD 156.5bn
    Capex at depreciation, working capital in reinvestment
    USD 188.7bn
    Less reinvestment at g/ROIC (18.2% of NOPAT)
    USD -34.4bn
    Capitalised
    USD 154.4bn
    ROIC (reported)
    13.7%
    Terminal value, undiscounted
    USD 2284.5bn
    Terminal value, discounted
    USD 970.9bn
    Enterprise value
    USD 1279.8bn
    Less net debt
    USD 124.3bn
    Equity value
    USD 1155.5bn

    Exit at 15.3x EBITDA

    Value per shareUSD 636.51

    84% of EV

    Terminal value, undiscounted
    USD 3930.0bn
    Terminal value, discounted
    USD 1670.1bn
    Enterprise value
    USD 1979.1bn
    Less net debt
    USD 124.3bn
    Equity value
    USD 1854.8bn

    Spread between methods: 46%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.43%589.92610.75636.69669.47711.69
    8.43%473.00483.07495.52511.01530.48
    9.43%387.00391.19396.54403.32411.88
    10.43%321.43322.27323.69325.77328.68
    11.43%270.03268.94268.10267.58267.41

    Outlined: this model. Green text: above today's price of 119.22. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year10.5%24.5%12.2%
    EBIT margin33.3%30.7%12.2%
    Discount rate-9.4%16.7%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.