Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 1 Jun 2026
ORCL· Technology
Oracle
Oracle is a sticky database empire priced for a future it has not yet earned, with a 35.8 P/E and owner earnings that are actually negative.
Buffett fit
Partial fit
Owner
62
Durability
51
Management
45
Price
5
Score updated 22 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned the whole company at this price I would be paying about 35.8 times earnings for a business whose earnings per share have actually shrunk at a 1.1% annual rate.
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The 66.4% and the high cost of switching databases give Oracle real staying power, and a five-year return on capital near 10.9% confirms the franchise is genuinely productive.
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Management has shrunk the share count at about 1.4% a year, which I like in principle, but they have done it while piling on debt to a 4.2 ratio and net debt of 4.2 times EBITDA.
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There is no here, and I will say so plainly. The yield is actually negative at roughly minus 0.07%, meaning at today's price the business is throwing off no real owner cash at all, and the 35.8 and 40.1 EV/ both scream expensive.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1Wide switching-cost : a 66.4% reflects that comes from customers being unable to cheaply leave the database.
- 2High operating profitability, with a 30.8% that few software peers sustain at this revenue scale.
- 3Steady top-line growth of about 9.1% annually as the cloud business scales.
- 4A genuinely productive franchise over time, shown by a five-year return on capital of roughly 10.9%.
Concerns
7- 1Valuation is the first and biggest problem: a 35.8 and a 40.1 EV/ leave no room for error, and the yield is actually negative at about minus 0.07%.
- 2The balance sheet is stretched, with at 4.2 and net debt at 4.2 times EBITDA.
- 3 is negative relative to earnings at minus 3.2%, so reported profit is not turning into spendable cash.
- 4Earnings per share have gone backward, shrinking at a 1.1% annual rate despite the share .
Price history
$129+31.4%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Oracle sells database software, enterprise applications, and increasingly cloud infrastructure, and it earns a 66.4% and a 30.8% because once a company runs its books on Oracle, ripping it out is painful and expensive. Revenue is growing at about 9.1% a year as the company spends heavily to chase the cloud wave. The trouble is that the cash is going out the door faster than it is coming back, with running slightly negative against reported earnings.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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