ORCL
Oracle Corp.
Recurring SaaS
Price today
$128.14
what the market pays
Worth
$133.31
calculated cycle value
Price is 4% below its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Software and subscriptions
$129.55
per share
How it's calculated
TRANSITORY NEGATIVE FCF — capex $50B FY2026 AI buildout. OCF $20.8B solid. RPO $553B (+325%) = 8x annual revenue committed (OpenAI, Meta, NVIDIA, xAI). IV $105 = EV/Rev 5x FY2027 ($90B guidance). Optimistic IV 7x = $170 (+17%). Debt $162B possibly over-penalized given RPO backing. BARGAIN <$84. Attractive 7x: <$153.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Recurring SaaS · vs 26 peers
You pay 21x times this business's cash flow; its sector median is 20.3x.
4% below what Charlie thinks it's worth (21.9x) — that gap is your safety margin.
Why Fair price?
Its free cash flow is $5.92/share × 21.9x multiplier plus $3.76 in net cash = $133.31 in intrinsic value. Today's price of $128.14 is just 4% off that value — not cheap, not expensive, that's a fair price.
This is a quality business. The price reflects that quality.
There's no extra safety margin. Not the best time to buy new.
To enter with a margin, the price should drop to $106.65–$126.64.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$106.65
-20% off Value
🟡 Discounted
≤$126.64
-5% off Value
⚪ Today
$128.14
+4% Valor
Fair price
Good business at a fair price. If you already own it, holding makes sense. For a new position, wait for a better price.
“It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
— Warren Buffett
Model updated · July 2026
The business
Oracle rents out the digital warehouses where the world's AI keeps its brain.
Oracle sells databases and enterprise software by subscription, and now rents out cloud computing capacity (OCI) to train artificial intelligence. It charges multi-year contracts: recurring revenue of $67.4B and signed commitments from clients like OpenAI, Meta and NVIDIA totaling $553B, eight times its annual billing.
Switching databases is like changing a building's foundation with people still inside: expensive, slow and terrifying. That fear of migrating locks in decades of clients. Its AI layer is newer and less defensible, but long-term contracts buy time.
Revenue history
From $42.4B to $67.4B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $67.4B · FY2026
Of every $100 in sales, $75 goes to costs and operations; $25 is left as net profit (25% margin).
Catalysts and risks
RPO (contracted revenue not yet billed) of $553B, +325% year-over-year.
Guidance of $90B in revenue for FY2027.
AI infrastructure buildout scaling capacity for clients already signed.
Capex of $50B in FY2026 leaves free cash flow at -$23.7B.
High debt financing the data center expansion.
The AI cloud faces Amazon, Microsoft and Google, rivals with more muscle.
Charlie's note
“You pay nearly 22 times cash flow for a business growing at 20% with clients who don't leave. Reasonable if the buildout delivers what's promised; the negative cash flow is the bill for building today what you'll charge for over a decade.”
Analysis · June 2026
So when would be a good price for Oracle Corp.?
By our calculation, not yet. We will email you the day it drops to $126.64 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.