Credit: Shutterstock photoShares of Oracle CorporationORCL have given moderate returns over the last 12 months. The company's stock delivered a return of 11.2% compared with the S&P 500's return of 12.6% over the period.
Of late, a series of lawsuits involving Application Program Interfaces and software have kept the stock's upward momentum in check. However, the company's take on the cloud looks promising in the long run.
Oracleannounced on Tuesday that it has acquired LogFire, a privately-held company that specializes in providing cloud-based Software as a Service (SaaS), warehouse management solutions. However, the company didn't divulge the details of the financial terms of the acquisition.
The move is expected to strengthen Oracle's foothold in the niche segment of cloud-based supply chain management solutions and be a value addition to the company's existing Oracle Supply Chain Management (SCM) Cloud suite.
Why This Move?
In today's world, businesses that are highly dependent on the supply chain are under constant pressure to keep pace with the latest business trends such as integrated logistics, dynamic sourcing and omni-channel fulfillment. They also look for ways to cut down costs and increase the operating efficiency of the organization.
The Oracle SCM solution enables organizations to upgrade their supply chain processes. The integration of LogFire will enhance the warehouse management capabilities of the cloud-based solution.
Market Size
As per some media reports, the cloud market will be worth more than $200 billion in 2016 with further upside potential. Hence, there is enough room for Oracle to fuel growth in this segment.
We note that with the presence of some heavyweight players such as IBM IBM , Google and Microsoft, competition in the cloud space is tough. However, Oracle's strategic acquisitions will help it to tide over the tough times.
ORACLE CORP Price
ORACLE CORP Price | ORACLE CORP Quote
Zacks Rank & Key Picks
At present, Oracle carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Autobytel Inc. ABTL , and Stamps.com Inc. STMP , sporting a Zacks Rank #1 (Strong Buy) and PetMed Express, Inc. PETS , carrying a Zacks Rank #2 (Buy).You can see the complete list of today's Zacks #1 Rank stocks here.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here ).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
