Okta (OKTA) AI Stock Analysis

• Market Cap: $18.56B
• Dividend Yield: N/A
• Average Volume (3M): 3.27M
• Price to Earnings (P/E): 2026.3
• Beta (1Y): 1.51
• Revenue Growth: 15.33%
• EPS Growth: N/A
• Country: US
• Employees: 5,908
• Sector: Technology
• Sector Strength: 48
• Industry: Software
• EPS (TTM): 0.06
• Shares Outstanding: 163,604,690
• 10 Day Avg. Volume: 5,183,091
• 30 Day Avg. Volume: 3,269,641
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 7.33
• Price to Cash Flow (P/CF): 29.20
• P/FCF Ratio: 30.10
• 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: $115.72
• Price Target Upside: -0.51% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 31

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

Okta reported resoundingly positive Q4 results ahead of both analyst and consensus expectations with 25% RPO growth significantly outpacing revenue growth.

Product Development

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

Negative Factors

Market Concerns

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

Okta Business Overview & Revenue Model

Company Description

Okta, Inc. provides identity management services to enterprises. Its products include Single Sign-On, Adaptive Multi-Factor Authentication, Mobility Management, Lifecycle Management, Universal Directory, API access management, API products and integration network services.

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
742.00K	488.00M	63.00M	87.36M	110.59M
	Operating Cash Flow
750.00K	512.00M	86.00M	104.12M	127.96M
	Investing Cash Flow
-314.00K	441.00M	-130.00M	-366.81M	-1.31B
	Financing Cash Flow
-359.00K	-883.00M	48.00M	89.07M	1.09B

Okta Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 116.31
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OKTA, the sentiment is Positive. The current price of 116.31 is above the 20-day moving average (MA) of 96.17, above the 50-day MA of 90.22, and above the 200-day MA of 85.85, indicating a bullish trend. The MACD of 2.77 indicates Negative momentum. The RSI at 75.59 is Negative, neither overbought nor oversold. The STOCH value of 66.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OKTA.

Okta Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZS	80 Outperform	$29.74B	―	-3.24%	―	30.77%	79.05%
CRWD	77 Outperform	$96.10B	721.64	-0.69%	―	31.35%	―
NOW	74 Outperform	$186.65B	133.88	16.53%	―	22.44%	-18.31%
ZM	73 Outperform	$22.83B	23.61	11.92%	―	3.05%	55.96%
OKTA	69 Neutral	$18.56B	2,026.31	0.46%	―	15.33%	―
TWLO	68 Neutral	$17.52B	―	-1.24%	―	7.32%	88.51%
Sector *	59 Neutral	$22.39B	11.53	-18.05%	2.31%	5.00%	-25.89%

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.