Tomer Zilberman, an analyst from Bank of America Securities, reiterated the Sell rating on Okta. The associated price target is $75.00.
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Tomer Zilberman has given his Sell rating due to a combination of factors impacting Okta’s future performance. Despite Okta’s strong second-quarter results, with revenue and cRPO growth surpassing market expectations, the company’s guidance for the upcoming quarters does not reflect this momentum. The guidance for the third and fourth quarters aligns closely with consensus estimates, suggesting that the growth observed in the first half of the year may not continue.
Moreover, while Okta has shown improvements in profitability and customer demand stabilization, these strengths are not translating into superior future guidance. The company’s management has adjusted its guidance to reflect current market conditions, but increasing competition and potential market dynamics pose challenges. Additionally, Okta’s recent acquisition of Axiom Security indicates a strategic response to competitive pressures, further highlighting the competitive landscape’s impact on its outlook.