Okta (OKTA) AI Stock Analysis

• Market Cap: $15.96B
• Dividend Yield: N/A
• Average Volume (3M): 4.14M
• Price to Earnings (P/E): 1568.8
• Beta (1Y): 1.24
• Revenue Growth: 15.33%
• EPS Growth: N/A
• Country: US
• Employees: 5,914
• Sector: Technology
• Sector Strength: 40
• Industry: Software - Infrastructure
• EPS (TTM): 0.06
• Shares Outstanding: 165,819,290
• 10 Day Avg. Volume: 3,099,620
• 30 Day Avg. Volume: 4,137,528
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 7.57
• Price to Cash Flow (P/CF): 17.30
• P/FCF Ratio: 17.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $117.59
• Price Target Upside: 27.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 34

Okta's strong revenue growth and cash flow generation are significant strengths, bolstered by robust financial performance indicators. The technical analysis shows positive momentum, although the high RSI suggests caution. The valuation is a concern with a very high P/E ratio, indicating potential overvaluation. Positive sentiment from the recent earnings call adds confidence, despite some operational challenges.

Positive Factors

Financial Performance

The company's strong performance in F4Q25 was highlighted by significant growth in revenue and operating margin, exceeding analyst expectations.

Market Position

The identity market is poised for sustained growth and convergence, which benefits Okta.

Product Innovation

New product contributions were a significant highlight, with new offerings accounting for 20% of overall Q4 bookings, indicating strong market reception.

Negative Factors

Competitive Landscape

Continued structural concerns centered around the competitive landscape and underlying market growth.

Execution Consistency

Okta has limited estimate upside and limited multiple upside due to inconsistent execution.

Macroeconomic Factors

Poor macroeconomic conditions could impact the capacity for enterprise IT investments and the health of supporting ecosystem partners.

Okta Business Overview & Revenue Model

Company Description

Okta, Inc. provides identity solutions for enterprises, small and medium-sized businesses, universities, non-profits, and government agencies in the United States and internationally. The company offers Okta Identity Cloud, a platform that offers a suite of products and services, such as Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization; Single Sign-On that enables users to access applications in the cloud or on-premise from various devices; Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, Web applications, and data; Lifecycle Management that enables IT organizations or developers to manage a user's identity throughout its lifecycle; API Access Management that enables organizations to secure APIs; Access Gateway that enables organizations to extend the Okta Identity Cloud from the cloud to their existing on-premise applications; and Advanced Server Access to secure cloud infrastructure. It also provides Auth0 products, including Universal Login that allows customers to provide login experience across different applications and devices; Attack Protection, a suite of security capabilities that protect from malicious traffics; Adaptive Multi-Factor Authentication that minimizes friction to end users; Passwordless authentication enables users to login without a password and supports in various login methods; Machine to Machine provides standards-based authentication and authorization; private Cloud that allows customers to run a dedicated cloud instance of Auth0; and Organizations that enables customers to independent configurations, login experiences, and security options. It offers customer support, training, and professional services. It sells its products directly to customers through sales force and channel partners. The company was formerly known as Saasure, Inc. Okta, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.

How the Company Makes Money

Okta makes money primarily through a subscription-based revenue model. The company offers its products and services on a Software-as-a-Service (SaaS) basis, charging customers recurring fees for access to its cloud-based identity and access management solutions. Key revenue streams include subscriptions to its Identity Cloud platform, which encompasses a range of services such as Single Sign-On (SSO), Multi-Factor Authentication (MFA), Lifecycle Management, and API Access Management. Okta's revenue is further bolstered by professional services, which include training, implementation, and consulting services to help clients effectively integrate and optimize Okta's solutions. The company also benefits from significant partnerships with technology vendors and service providers, which expand its reach and enhance its offerings by integrating with a wide array of applications and IT infrastructure.

Okta Financial Statement Overview

Summary

Okta demonstrates solid revenue growth and cash flow generation, which are critical for a software company. While profitability remains a challenge, the company is showing signs of improvement. The balance sheet is strong with low leverage and substantial equity, providing a cushion against financial volatility. Continued focus on profitability and cost management could enhance future financial performance.

Income Statement

Okta's income statement shows a strong revenue growth trajectory, with a TTM revenue increase to $1.93 billion from $1.85 billion the previous year. The gross profit margin remains high at approximately 76%, indicating operational efficiency. However, the net profit margin is just 0.26% due to significant operating expenses, though it marks an improvement from the previous negative margins. EBIT and EBITDA margins are improving but remain negative, reflecting ongoing profitability challenges.

Balance Sheet

The balance sheet reveals a stable equity base with a debt-to-equity ratio of 0.15, suggesting manageable leverage. Stockholders' equity covers 67.9% of total assets, highlighting a robust equity position. However, the return on equity is minimal at 0.08% due to low net income. The company maintains liquidity with significant cash reserves relative to its debt obligations.

Cash Flow

Okta's cash flow statement indicates strong cash generation, with a TTM operating cash flow of $464 million and free cash flow of $450 million, showcasing a positive free cash flow to net income ratio. The operating cash flow to net income ratio is significantly high, reflecting effective cash management. Free cash flow growth remains stable, highlighting a strong cash position despite the net income challenges.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
2.61B	2.26B	1.86B	1.30B	835.42M
	Gross Profit
1.99B	1.68B	1.31B	903.80M	617.74M
	EBIT
-74.00M	-460.00M	-783.00M	-767.10M	-204.16M
	EBITDA
25.00M	-230.00M	-676.00M	-649.90M	-156.00M
	Net Income Common Stockholders
28.00M	-355.00M	-815.00M	-848.41M	-266.33M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.52B	2.20B	2.58B	2.50B	2.59B
	Total Assets
9.44B	8.99B	9.31B	9.21B	3.30B
	Total Debt
952.00M	1.27B	2.33B	2.00B	1.95B
	Net Debt
543.00M	932.00M	2.07B	1.74B	1.51B
	Total Liabilities
3.03B	3.10B	3.84B	3.28B	2.60B
	Stockholders Equity
6.41B	5.89B	5.47B	5.92B	694.04M
Cash Flow		Free Cash Flow
730.00M	488.00M	63.00M	87.36M	110.59M
	Operating Cash Flow
750.00M	512.00M	86.00M	104.12M	127.96M
	Investing Cash Flow
-314.00M	441.00M	-130.00M	-366.81M	-1.31B
	Financing Cash Flow
-359.00M	-883.00M	48.00M	89.07M	1.09B

Okta Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 91.93
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OKTA, the sentiment is Negative. The current price of 91.93 is below the 20-day moving average (MA) of 109.16, below the 50-day MA of 101.49, and above the 200-day MA of 87.64, indicating a neutral trend. The MACD of 2.52 indicates Positive momentum. The RSI at 46.76 is Neutral, neither overbought nor oversold. The STOCH value of 11.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OKTA.

Okta Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PANW	78 Outperform	$101.68B	86.76	23.38%	―	13.86%	-46.44%
ZS	73 Outperform	$27.03B	―	-1.21%	―	27.77%	89.39%
CRWD	73 Outperform	$79.72B	721.64	-0.69%	―	29.39%	-119.62%
FTNT	70 Outperform	$65.14B	37.48	338.74%	―	12.27%	54.69%
OKTA	69 Neutral	$15.96B	1,568.77	0.46%	―	15.33%	―
Sector *	57 Neutral	$18.57B	9.42	-13.42%	2.72%	5.01%	-23.43%
NET	55 Neutral	$33.50B	―	-8.71%	―	28.76%	58.13%

Okta Corporate Events

Okta Reports Record Profitability and Revenue Growth

On March 3, 2025, Okta announced its financial results for the fourth quarter and fiscal year ending January 31, 2025, showcasing significant growth and record profitability. The company reported a 13% year-over-year increase in total revenue for the fourth quarter, with subscription revenue also rising by 13%. Remaining performance obligations grew by 25%, indicating strong future revenue potential. Okta achieved record operating cash flow of $286 million and free cash flow of $284 million, reflecting its robust financial health. The results underscore Okta’s strategic positioning in the identity management industry, as it continues to innovate and meet the security needs of its customers.

Okta Appoints Eric Kelleher as President and COO

Okta, Inc. has appointed Eric Kelleher as its new President and Chief Operating Officer, effective February 1, 2025. Kelleher, who has been with Okta since 2016, previously held several leadership positions within the company and has extensive experience in the SaaS industry. He will be tasked with overseeing various operational teams and driving growth as Okta continues to lead in identity and cybersecurity solutions. The appointment coincides with Eugenio Pace’s retirement from the role of President, Business Operations. Kelleher’s new role is expected to bolster Okta’s focus on operational excellence and customer satisfaction, thereby enhancing its market position and growth prospects.