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Oracle NetSuite to Aid Denaster Expand International Presence

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OracleORCL NetSuite was recently selected by United Arab Emirates (UAE)-based Denaster General Trading LLC. With NetSuite deployment, the retail distributor attempts to expand its business beyond Middle East, particularly in the U.K. and India.

NetSuite will also enable Denaster to revamp its existing accounting and stock supervision systems for a unified reporting structure which can be accessed in real time. With the streamlined business processes and robust cloud capabilities of NetSuite, Denaster is anticipated to enhance productivity and upscale operations.

Additionally, Denaster expects strengthening regional presence by establishing local businesses in new markets.

In the words ofVP of Oracle NetSuite for EMEA region, Nicky Tozer, "With NetSuite, Denaster will be able to accelerate its expansion and deliver greater value to its brand and retail partners in the Middle East and beyond."

Coming to the price performance, shares of Oracle have returned 8.6% in the past six months compared with the industry 's decline of 0.8%.

NetSuite Adoption to Favor Top-Line Growth

Notably, Oracle concluded NetSuite acquisition in 2016. The buyout enabled the company in penetrating the small and medium-sized business ("SMB") marketin Enterprise Resource Planning (ERP) segment, where it lacked a strong presence.

Moreover, the acquisition aided the company expand its cloud portfolio and gain foothold in the market dominated by Amazon's AMZN Amazon Web Services ("AWS") and Microsoft's MSFT Azure cloud platforms.

Per ResearchAndMarkets data, global ERP software market is envisioned to grow to $74.2 billion by 2026 from $34.1 billion in 2017 witnessing a CAGR of 9%. We believe robust adoption of NetSuite will aid Oracle to strengthen presence in the ERP market.

Oracle is benefiting from the ongoing cloud-based momentum. In the second quarter of fiscal 2019, NetSuite ERP revenues increased 25% in the trailing 12-month period.

Furthermore, Oracle is striving to enhance the functionalities of cloud-based applications which bode well. The company recently inked a deal to acquire DataFox to enhance cloud-based data engine with artificial intelligence (AI) capabilities.

Per Gartner data, the global SaaS market is anticipated to reach $117.1 billion in 2021 at a CAGR of 18.1% from $60.2 billion in 2017. We believe the company is well poised to capitalize on growth opportunities of its domain on the back of its ongoing efforts in the domain.

Risks Remain

However, a consolidating applications market is fueling competition in the sector, which is not conducive to the company's growth prospects at least in the near term. Moreover, stiff competition in the cloud is anticipated to limit margin expansion.

Zacks Rank & Stocks to Consider

Oracle carries a Zacks Rank #4 (Sell).

Cadence Design Systems, Inc. CDNS is a stock worth considering in the same industry, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Long-term earnings growth rate for Cadence is pegged at 12%.

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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.

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