Tomer Zilberman, an analyst from Bank of America Securities, maintained the Sell rating on Okta. The associated price target remains the same with $75.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Tomer Zilberman’s rating is based on several factors that suggest caution regarding Okta’s future performance. Despite Okta’s recent strides in profitability and free cash flow generation, there are structural concerns about the competitive dynamics and underlying market growth. The company’s recent outperformance is believed to be driven by conservative guidance, which might not be sustainable in the long term.
Moreover, the market entry of platform vendors like Palo Alto Networks and CrowdStrike into identity solutions could increase competitive pressure on Okta. Although Okta has announced strategic initiatives, such as acquiring Axiom Security and realigning its go-to-market strategy, these efforts may take time to significantly impact performance. Additionally, while Okta’s guidance has been conservative, there is a belief that business momentum may have peaked, as indicated by stable net retention rates and in-line revenue guidance, suggesting limited upside potential.