(FORTUNE Magazine) - During the 1990s, only seven FORTUNE 500 companies averaged higher annual earnings growth than Oracle (Research), the world's second-largest software company, with a market value of $65 billion. But despite solid profits--earnings per share rose 31% in fiscal 2005--its stock has gone nowhere for the past three years. What gives?

First of all, Oracle has more than five billion shares outstanding, which means it takes a lot of juice to push the price up. But Oracle's issues run deeper: Its growth prospects are murky, and the $17 billion that CEO Larry Ellison has spent on acquisitions over the past two years cannot mask that fact.

In both of its two core markets (databases and business applications), Oracle is fighting a brutal two-front war--first against fierce rivals like IBM (Research), Microsoft (Research), and SAP (Research), then against scrappy open-source vendors like MySQL. Making things tougher are lingering integration issues from Oracle's purchase of PeopleSoft in 2005 and Siebel Systems in January. Oracle hopes to weave the best of its acquired products into a software package called Fusion, slated to arrive in 2008, but the project is long on hype and short on results so far.

Finally, some investors are spooked by Ellison's refusal to name a successor. The smart money is on co-president and CFO Safra Catz, but the former DLJ banker has few fans on the Street. "These financial types don't seem like the right fit to me," says JMP Securities' Patrick Walravens, who still rates Oracle a strong buy. Even though the stock seems cheap (it trades at 16 times estimated 2006 earnings) and earnings should rise by double digits in the current fiscal year, Oracle's shares will probably remain stagnant until the Fusion confusion gets sorted out.