Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).
Stocks with improving earnings metrics are worthy of your extra attention. Click here to discover our CHEAT SHEET stock picks now!
Here’s your Cheat Sheet to how the top 5 software stocks rank via earnings trends:
Oracle Corp. (NASDAQ:ORCL): Current Price $34.28
|Revenue ($) in millions||22,430||23,250||26,820||35,620||37,120|
|Diluted EPS ($)||1.06||1.09||1.21||1.67||1.96|
Oracle has produced solid growth in revenue and EPS every year after 2008.
Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:
|Quarter||Nov. 30, 2011||Feb. 29, 2012||May. 31, 2012||Aug. 31, 2012||Nov. 30, 2012|
|Revenue ($) in millions||8,792||9,039||10,920||8,181||9,094|
|Diluted EPS ($)||0.43||0.49||0.68||0.41||0.53|
There’s obviously a slowdown in revenue and EPS after May 2012, though we like the rise in the EPS in November 2012. Oracle stays in the reckoning…