It’s no secret that the market has had a stellar showing over the past month, with technology stocks the primary driving force. Several stocks, including Oracle ORCL and Roku ROKU, have also seen sentiment turn around in a big way, both outperforming relative to the S&P 500.
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Let’s take a closer look at how each presently stacks up.
Oracle Bounces Back
Oracle shares have seen a nice comeback over the past month, a big shift from the huge drop in sentiment that we saw beginning last September or so. The market’s opinion became rather downbeat onthe back of capital-related concerns stemming from its current data center buildout, but recent quarterly results and robust demand trends for cloud computing solutions have helped ease those concerns.
Cloud revenues soared 44% YoY to $8.9 billion in its latest release, at the high end of its previous guidance. Importantly, its remaining Performance Obligations, or RPO, ended the quarter at $553 billion, up a triple-digit 325% from the same period last year.
Sales growth has remained broadly strong for the tech titan, as shown below. Revenue of $17.1 billion throughout the above-mentioned quarter reflected a 21% YoY growth rate, reflecting the strongest growth rate we’ve seen in years from the company.
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Roku Reports Record Free Cash Flow
Roku shares are benefiting from positive quarterly results that were delivered just recently, posting a double-beat relative to our consensus expectations. Importantly, its profitability picture, along with its cash generation, strengthened significantly, with gross profit climbing 27% YoY to $565 million. Free cash flow, on a trailing twelve-month basis, totaled $538.8 million, reflecting a new company record.
The EPS outlook across its current and next fiscal year have moved bullishly, with upward revisions coming in following the release. Revenue revisions have also moved bullishly across the same timeframes, painting a solid demand outlook for Roku.
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Roku’s platform revenue grew 28% year-over-year as well in the above-mentioned release, with strong Advertising and Subscription results leading the charge. Total Streaming Hours also saw a nice 8% YoY climb, with the company also now reporting more than 100 million households worldwide use a device powered by the Roku TV operating system (OS) monthly.
The favorable trends among its customer base help underpin the favorable sales revisions, with operational efficiencies also leading to the strengthening EPS outlook.
Bottom Line
Both Roku ROKU and Oracle ORCL have seen great strength as of late following some rough action throughout the first few months of the year, with favorable quarterly results helping drive sentiment shifts. Favorable EPS revisions paired with strong top line performances help keep the near-term momentum story in favor, with both deserving a close look.
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This article originally published on Zacks Investment Research (zacks.com).