Identity management software group Okta (OKTA) is set to release its Q2 earnings report this week. This has some investors wondering whether it’s a good idea to buy shares of OKTA stock beforehand.
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What Wall Street Expects
Wall Street is expecting Okta to report earnings per share for the period of $0.84, which would mark a year-over-year growth of 16.7%. The consensus mark for revenues is pegged at $711 million, indicating an increase of 10.1%.
Will OKTA be able to beat these estimates? As can be seen below, it has a strong track record in doing just that.
Key Issues Ahead of Earnings
Let’s take a look at what analysts are saying about Okta ahead of Q2 earnings. In its Q1 earnings, the company reported robust cash flow, record non-GAAP operating profitability, and a profit margin, with a notable focus on large customers and new product contributions. Workflow executions remarkably increased by nearly 400% over the past three years, reaching approximately $40 billion in March.
However, it also highlighted economic uncertainty and a decline in net revenue retention rate.
Junaid Siddiqui of Truist remains optimistic recently upgrading Okta to Buy from Hold with a price target of $125, up from $100. The firm believes Okta is approaching an inflection point as headwinds from seat count pressure and go-to-market changes are seen abating in the second half of FY26 while the company’s all-in-one identity platform is resonating with customers.
But Joseph Gallo of Jefferies lowered the firm’s price target on Okta to $100 from $105 and kept a Hold rating on the shares. The firm expects fiscal Q2 Remaining Performance Obligations (RPO) to beat guidance of $2.203 billion, but thinks Okta will likely guide Q3 RPO growth below the consensus view of 9.4%. That, he said, may raise questions on the FY27 revenue growth trajectory.
Is OKTA a Good Stock to Buy Now?
On TipRanks, OKTA has a Moderate Buy consensus based on 22 Buy, 10 Hold and 1 Sell ratings. Its highest price target is $148. Okta stock’s consensus price target is $122.25, implying a 31.92% upside.
