Foolish Forecast: Oracle Musings

On Tuesday night, we'll get a fourth-quarter and full-year report from software colossus Oracle (Nasdaq: ORCL  ) . Have a seat while I go down to Delphi to breathe some inspirational vapors -- your prophecy is coming right up.

What analysts say:

• Buy, sell, or waffle? Thirty-seven analyst firms cover Oracle today. Twenty-four of them want to buy, 12 are holding, and one lonely analyst is sitting on the sell side. In our own Motley Fool CAPS investor hive mind, over 1,100 players have weighed in on the stock to make it a three-star issue.
• Revenues. $5.6 billion would satisfy the analyst crowd and represent a 15% annual increase from last year's $4.85 billion. Management guidance shows a range from $5.43 billion to $5.63 billion.
• Earnings. Wall Street wants to see $0.35 of pro forma earnings per share, a penny above Oracle's own guidance and up from $0.29 per share a year ago.

What management says:
CFO Safra Catz thinks her company is in fine shape. In the latest earnings report, she said that Oracle "exceeded guidance on every metric with strong revenue growth across all product lines and in all geographies. We've now completed eleven quarters of our five year EPS growth plan of 20% per year, and we are delivering earnings growth comfortably ahead of that target."

What management does:
The margin picture is rock-steady, as you would expect from a company with a $100 billion market cap and three decades of operating history. And that only makes the growth story more impressive. You just don't see steady 20% sales growth in many companies Oracle's size and age, and that small peer group includes respectable businesses like Comcast (Nasdaq: CMCSA  ) , Morgan Stanley (NYSE: MS  ) , and Apple (Nasdaq: AAPL  ) . The net income line has caught up with its net sales cousin lately, too. Very nice.

Margins	11/2005	2/2006	5/2006	8/2006	11/2006	2/2007
Gross	76.9%	77.3%	77.6%	77.1%	76.7%	76.6%
Operating	34.1%	34.5%	34.8%	34.7%	34.5%	34.5%
Net	22.3%	23.1%	23.5%	23.2%	23%	23.3%

YOY Growth	11/2005	2/2006	5/2006	8/2006	11/2006	2/2007
Revenue	22.1%	21.9%	21.9%	23.1%	24.7%	26.9%
Earnings	-2.4%	8.7%	17.2%	22%	28.6%	27.9%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
I don't want to sound like a broken record, but the real fireworks in this report will -- as always -- come in the attendant conference call. CEO Larry Ellison and his crew are sure to get their digs in on rivals like Microsoft (Nasdaq: MSFT  ) and SAP (NYSE: SAP  ) any way they can, whether it's by claims of market share gains, customers snatched from under their noses, or some new insult we haven't heard yet.

But this isn't some entertainment venue -- it's the stock market. Regardless how thrilling these verbal volleys may be, investors need something more sub, sub -- stop -- substantial, and fortunately for investors, Oracle keeps delivering fine results, too.

The stock is valued accordingly, with a trailing P/E ratio higher than Microsoft's or Cisco's (Nasdaq: CSCO  ) . But thanks to Oracle's outstanding growth, the estimated forward P/E lands at about 18 for all three today. Food for thought.

Microsoft is a Motley Fool Inside Value pick.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure will help you find the road ahead.