Rimini Street: Analyst Raises Price Target to $6.50 Amid Proposed Settlement with Oracle

Roth Capital raised Rimini Street's price target to $6.50 from $5 and maintained a Buy rating. The company disclosed a proposed settlement with Oracle that ends 15 years of litigation, allowing Rimini Street to focus on growth. Roth incorporated lower legal costs and an improved growth outlook into its model. The settlement is a "material net positive" for shares.

Oracle (ORCL) and Rimini Street have reached a settlement, ending a 15-year legal dispute, as reported by Roth Capital analyst Richard Baldry. The settlement, disclosed by Rimini Street, is expected to bring significant relief to the company, allowing it to focus on growth rather than legal battles. The resolution is seen as beneficial for Rimini Street despite receiving less in legal fee repayments than originally anticipated.

The settlement is a "material net positive" for Rimini Street shares, according to Baldry, who raised the price target for Rimini Street from $5 to $6.50 while maintaining a Buy rating. The analyst noted that resolving the costly legal process allows Rimini Street to refocus on growth, which is a significant positive for its shares.

Wall Street analysts forecast an average target price for Oracle Corp (ORCL) of $225.71, with a high estimate of $275.00 and a low estimate of $175.00. The average target implies a downside of 4.49% from the current price of $236.33. Oracle Corp's average brokerage recommendation is currently 2.1, indicating an "Outperform" status. GuruFocus estimates the GF Value for Oracle Corp (ORCL) in one year at $152.23, suggesting a downside of 35.58% from the current price of $236.325.

Rimini Street, Inc. provides enterprise software products, services, and support, engaging in the provision of support services for Oracle and SAP enterprise software products. The company serves Fortune 500 companies and Fortune Global 100 companies across various industries. Rimini Street scored higher than 81% of companies evaluated by MarketBeat, and ranked 200th out of 674 stocks in the computer and technology sector.

Rimini Street's stock rose 34% to $5.30, touching a 52-week high, following the settlement announcement. The shares are up about 98% this year. The company has received a consensus rating of Hold, with no buy ratings, 1 hold rating, and no sell ratings. Analysts expect Rimini Street's earnings to grow by 13.64% in the coming year, from $0.22 to $0.25 per share. The P/E ratio of Rimini Street is 9.56, which is less expensive than the market average P/E ratio of about 122.41.

The settlement with Oracle is expected to have a positive impact on Rimini Street's financial performance and growth prospects. The company is now free to focus on its core business and expand its service offerings without the distraction of ongoing litigation.

References:
[1] https://www.gurufocus.com/news/2970376/oracle-orcl-and-rimini-street-settlement-ends-lengthy-legal-battle-orcl-stock-news?mobile=true
[2] https://www.marketwatch.com/story/rimini-street-hits-52-week-high-on-oracle-settlement-agreement-4e9e8451
[3] https://www.marketbeat.com/stocks/NASDAQ/RMNI/