Why Is ORCL Stock A Winner?

Synopsys stock (NASDAQ: SNPS) has fallen 23% in the past month. This decline followed a downbeat Q3 report, primarily due to the Design IP business losing a major foundry customer who pulled out of a partnership, citing market and client reasons.

Now, rather than buying the dip in SNPS, we believe Oracle stock (NYSE: ORCL) is a superior investment choice. Oracle demonstrates more attractive fundamentals, including stronger revenue growth during critical periods, higher profitability, and a more reasonable valuation compared to Synopsys, making it a better choice. Consider the data below:

• The revenue growth for ORCL in the Last 12 Months was 9.7%, compared to SNPS’s 8.0%.
• Moreover, the Last 3-Year Average revenue growth stood at 10.2%, surpassing SNPS’s 9.7%.
• ORCL excels in profitability across both periods – with an LTM margin of 31.6% and a 3-year average of 30.3%.

That being said, if you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 91% since its inception. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

SNPS offers electronic design automation software and intellectual property solutions for integrated circuits and various communication protocols such as USB, PCI Express, Ethernet, HDMI, and Bluetooth. Conversely, ORCL delivers cloud software services, industry-specific solutions, application licenses, license support, enterprise databases, software development languages, and middleware products.

Valuation & Performance Summary

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But do these figures reveal the complete narrative? Read Buy or Sell ORCL Stock to find out if Oracle’s advantage sustains under scrutiny or if Synopsys still has strategies to deploy (see Buy or Sell SNPS Stock).

Historical Market Performance

While ORCL seems more attractive than SNPS, investing in a single stock without comprehensive analysis can be risky. Consider the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.