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Oracle Corp. (ORCL)


Price to FCFE (P/FCFE)

Difficulty: Intermediate


Free Cash Flow to Equity (FCFE)

Oracle Corp., FCFE calculation

USD $ in millions

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12 months ended May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
Net income 11,083  3,825  9,335  8,901  9,938  10,955 
Noncontrolling interests in income 152  135  118  116  113  98 
Net noncash charges 3,576  3,766  3,449  3,474  3,272  3,550 
Changes in operating assets and liabilities, net of effects from acquisitions (260) 7,660  1,224  1,070  1,013  318 
Net cash provided by operating activities 14,551  15,386  14,126  13,561  14,336  14,921 
Capital expenditures (1,660) (1,736) (2,021) (1,189) (1,391) (580)
Proceeds from borrowings, net of issuance costs —  12,443  17,732  3,750  19,842  5,566 
Repayments of borrowings (4,500) (9,800) (4,094) (2,000) (1,500) — 
Free cash flow to equity (FCFE) 8,391  16,293  25,743  14,122  31,287  19,907 

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-22), 10-K (filing date: 2015-06-25), 10-K (filing date: 2014-06-26).

Item Description The company
FCFE Free cash flow to equity is the cash flow available to Oracle Corp.’s equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made. Oracle Corp.’s FCFE declined from 2017 to 2018 and from 2018 to 2019.

Price to FCFE Ratio, Current

Oracle Corp., current P/FCFE calculation, comparison to benchmarks

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No. shares of common stock outstanding 3,335,819,000
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in millions) 8,391 
FCFE per share 2.52
Current share price (P) 57.54
Ratio
P/FCFE 22.87
Benchmarks
P/FCFE, Competitors
Adobe Inc. 24.79
Alphabet Inc. 34.31
Facebook Inc. 36.87
International Business Machines Corp. 11.82
Intuit Inc. 37.36
Microsoft Corp. 47.48
salesforce.com inc. 29.60
P/FCFE, Sector
Software & Computer Services 31.43
P/FCFE, Industry
Technology 25.02

Based on: 10-K (filing date: 2019-06-21).

If company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.

Otherwise, if company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.


Price to FCFE Ratio, Historical

Oracle Corp., historical P/FCFE calculation, comparison to benchmarks

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May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
No. shares of common stock outstanding1 3,335,819,000 3,981,155,000 4,136,682,000 4,122,730,000 4,336,077,000 4,454,889,000
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in millions)2 8,391  16,293  25,743  14,122  31,287  19,907 
FCFE per share4 2.52 4.09 6.22 3.43 7.22 4.47
Share price1, 3 56.12 44.10 50.75 40.01 41.06 40.15
Ratio
P/FCFE5 22.31 10.78 8.16 11.68 5.69 8.98
Benchmarks
P/FCFE, Competitors
Adobe Inc. 19.88 35.59 27.41 25.83 31.68
Alphabet Inc. 34.84 31.41 22.41 29.23 31.52
Facebook Inc. 30.97 32.08 33.48 52.13 64.54
International Business Machines Corp. 11.07 8.55 10.60 9.60 10.95
Intuit Inc. 29.29 42.22 21.01 18.76 19.03
Microsoft Corp. 37.57 8.86 10.12 9.99 10.47
salesforce.com inc. 29.09 52.51 25.44 50.00 164.03 21.68
P/FCFE, Sector
Software & Computer Services 27.38 15.81 16.14 14.64 15.66
P/FCFE, Industry
Technology 22.94 13.58 12.81 9.98 12.47

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-22), 10-K (filing date: 2015-06-25), 10-K (filing date: 2014-06-26).

1 Data adjusted for splits and stock dividends.

2 See Details »

3 Close price on the filing date of Oracle Corp.’s Annual Report.

2019 Calculations

4 FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 8,391,000,000 ÷ 3,335,819,000 = 2.52

5 P/FCFE = Share price ÷ FCFE per share
= 56.12 ÷ 2.52 = 22.31

Ratio Description The company
P/FCFE Price to free cash flow to equity is cash valuation indicator of stockholders’ equity. Oracle Corp.’s P/FCFE ratio increased from 2017 to 2018 and from 2018 to 2019.