Fundamentals · ORCL
DuPont (ROE Decomposition) for ORCL
AI-generated plain-English read of dupont (roe decomposition) for ORCL. Updated daily.
Leverage-driven ROE, deteriorating
highROE is falling (7.1%) and leverage of 4.51× is amplifying every problem. When a highly-levered company's ROE deteriorates, the real pain is usually in margins or debt service — check both.
What will probably happen
- ROE has been falling — without a reversal in the weakest leg, the next period will likely show further pressure.
- Elevated leverage (4.51×) is amplifying ROE in both directions. If margins slip, ROE will fall faster than the income statement suggests.
What to do
- If you HOLD this stock
- Leverage (4.51×) is doing the heavy lifting. Hold only if you're comfortable that the debt load is sustainable in a slower earnings environment. Watch interest coverage and free cash flow.
- If you are EVALUATING this stock
- Don't let the headline ROE (7.1%) mislead you — it's primarily a function of 4.51× leverage. A cleaner way to compare this company is on ROIC or on ROA, which strip out the capital structure effect.
- If you trade OPTIONS
- Leverage amplification + deteriorating ROE is structurally bearish. Elevated leverage means the stock can move sharply on bad news — protective puts or put spreads are justified on a fundamental basis, not just sentiment.
56 periods with all three DuPont legs populated — trend reads are reliable.
Technical details
Technical analysis
- ROE
- 7.1% — deteriorating
- Sector context
- not provided
- Periods analysed
- 56
- Primary ROE driver
- Leverage Driven
- Profitability (net margin)
- 24.6% — improving, healthy
- Asset efficiency (turnover)
- 0.06× — deteriorating, mixed
- Leverage (equity multiplier)
- 4.51× — deteriorating, healthy [elevated]
Key levels
| Level | Value |
|---|---|
| latest em | 4.513 |
| latest roe | 0.071 |
| latest margin | 0.246 |
| latest turnover | 0.064 |
| em high threshold | 4 |
| em critical threshold | 5 |