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Okta, Inc. (OKTA)
:OKTA

Okta (OKTA) AI Stock Analysis

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Okta

(NASDAQ:OKTA)

Rating:65Neutral
Price Target:
$113.00
▲(7.54%Upside)
Okta's stock score is primarily driven by its robust financial performance, with strong revenue growth and cash flow metrics. The earnings call and corporate events further support a positive outlook despite macroeconomic concerns. However, technical indicators and high valuation present near-term risks.
Positive Factors
Customer Growth
Okta reported strong up/cross sell, stable seats, and one of the strongest quarters for net new customers in the last two years.
Financial Performance
Okta continues to make strides towards improving profitability, reporting record net income of $158mn and a healthy free cash flow margin of 35%.
Product Development
Management highlighted new products continue to resonate exhibited by the number of workflow executions increasing ~400% over the past three years.
Negative Factors
Demand Concerns
The decline in the cRPO coverage ratio raised investor worries about hidden signals of weakness in demand, contrasting with the company's narrative.
Growth Deceleration
The focal point of the quarter was the weak underlying trends of the company in addition to a lackluster 2Q cRPO guide signaling further deceleration is on the horizon.
Revenue Guidance
The guide itself is low as the company added additional conservatism from macroeconomic factors and a specific business area headwind, which is considered justified.

Okta (OKTA) vs. SPDR S&P 500 ETF (SPY)

Okta Business Overview & Revenue Model

Company DescriptionOkta, 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 MoneyOkta makes money primarily through subscription fees for its cloud-based identity and access management services. The company offers its products on a per-user, per-month subscription basis, which provides a recurring revenue model. Key revenue streams include its Identity Cloud products, encompassing both workforce identity solutions for employee access and customer identity solutions for managing customer experiences. Significant partnerships, such as integrations with major cloud service providers and application vendors, enhance Okta's product offerings and expand its market reach. Factors contributing to its earnings include the rising demand for secure digital solutions and the growing need for efficient access management in increasingly complex IT environments.

Okta Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Chart InsightsOkta's Subscription revenue continues its steady upward trajectory, reflecting robust demand for its core offerings. However, Professional Services and Other revenue remains stagnant, indicating limited growth in this segment. The latest earnings call underscores strong cash flow and profitability, driven by new product growth and large customer success. Despite these positives, management's cautious guidance for FY 2026 highlights macroeconomic uncertainties and a sequential decline in cRPO, suggesting potential challenges ahead. The strategic specialization of sales teams, particularly in the U.S. public sector, is expected to bolster long-term growth.
Data provided by:Main Street Data

Okta Earnings Call Summary

Earnings Call Date:May 28, 2025
(Q1-2026)
|
% Change Since: -0.13%|
Next Earnings Date:Aug 27, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in profitability, cash flow, and new product growth, alongside successful large customer engagements and public sector strength. However, concerns about macroeconomic factors and their impact on future growth, along with sequential declines in cRPO and NRR, indicate a cautious outlook.
Q1-2026 Updates
Positive Updates
Strong Cash Flow and Record Profitability
Okta posted solid Q1 results with exceptional cash flow and record operating profitability and profit margin.
New Product Growth
New products such as Okta Identity Governance, Okta Privileged Access, and Identity Threat Protection with Okta AI showed strong contribution, with Workflow executions increasing nearly 400% over the past three years.
Large Customer Success
The number of customers with $1 million ARR and higher grew by 20%, indicating continued strength with large customers.
Successful Go-To-Market Specialization
The newly specialized sales teams showed early positive signals, with the Auth0 platform performing well following a record Q4.
Public Sector Strength
The U.S. public sector vertical showed strong performance with significant deals, including two of the top three deals in Q1.
Negative Updates
Macro Economic Concerns
The guidance for FY '26 reflects potential risks related to the uncertain economic environment, impacting revenue growth expectations.
Sequential Decline in cRPO
Guidance suggests a sequential decline in current RPO for Q2, indicating cautious outlook despite a strong Q1 performance.
NRR Decline
Net Revenue Retention (NRR) declined for the fourth consecutive quarter due to headwinds in seat and MAU upsells mid-contract.
Company Guidance
In the recent earnings call, Okta's management provided guidance for the second quarter and the full fiscal year 2026, reflecting a cautious approach due to potential macroeconomic uncertainties. For Q2, Okta anticipates total revenue growth of 10%, current remaining performance obligation (RPO) growth of 10% to 11%, a non-GAAP operating margin of 26%, and a free cash flow margin of approximately 19%. For the full fiscal year, they project total revenue growth between 9% and 10%, with a non-GAAP operating margin of 25% and a free cash flow margin of around 27%. Despite strong Q1 results, including exceptional cash flow and record profitability, the company is factoring in economic risks and the effects of their go-to-market team specialization into their guidance. This specialization is expected to yield long-term benefits, evident from the strong performance in specific segments such as Auth0 and the U.S. public sector.

Okta Financial Statement Overview

Summary
Okta demonstrates strong revenue growth and cash flow metrics, indicating operational efficiency and financial health. The balance sheet is solid with manageable leverage and strong equity backing. However, profitability remains a challenge, which needs addressing for long-term success.
Income Statement
72
Positive
Okta has demonstrated a strong revenue growth trajectory, with TTM revenue increasing significantly from previous years. The gross profit margin remains robust, indicating effective cost management. However, the company still faces challenges with profitability, as evidenced by negative EBIT and fluctuating net income. The improvement in EBITDA margin in the TTM period suggests operational efficiency gains, although the path to consistent profitability remains a work in progress.
Balance Sheet
75
Positive
The balance sheet reflects a strong equity position with a favorable equity ratio, highlighting financial stability. The debt-to-equity ratio is manageable, indicating prudent leverage use. Improvements in stockholders' equity strengthen the company's financial foundation. However, the relatively high level of liabilities warrants careful attention to ensure liquidity adequacy in the event of market fluctuations.
Cash Flow
78
Positive
The cash flow analysis reveals strong operational cash flow generation, with significant growth in free cash flow, particularly in the TTM period. The operating cash flow to net income ratio indicates efficient cash conversion, supporting financial flexibility. Despite fluctuations in financing and investing cash flows, the overall positive cash flow trajectory enhances Okta's capacity for reinvestment and strategic initiatives.
Breakdown
TTMMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income StatementTotal Revenue
2.68B2.61B2.26B1.86B1.30B835.42M
Gross Profit
1.52B1.99B1.68B1.31B903.80M617.74M
EBIT
-26.96M-74.00M-460.00M-783.00M-767.10M-204.16M
EBITDA
61.04M25.00M-230.00M-676.00M-649.90M-156.00M
Net Income Common Stockholders
68.06M28.00M-355.00M-815.00M-848.41M-266.33M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.37B2.52B2.20B2.58B2.50B2.59B
Total Assets
1.87B9.44B8.99B9.31B9.21B3.30B
Total Debt
1.08B952.00M1.27B2.33B2.00B1.95B
Net Debt
41.80M543.00M932.00M2.07B1.74B1.51B
Total Liabilities
1.47B3.03B3.10B3.84B3.28B2.60B
Stockholders Equity
398.39M6.41B5.89B5.47B5.92B694.04M
Cash FlowFree Cash Flow
520.24M730.00M488.00M63.00M87.36M110.59M
Operating Cash Flow
531.24M750.00M512.00M86.00M104.12M127.96M
Investing Cash Flow
-120.12M-314.00M441.00M-130.00M-366.81M-1.31B
Financing Cash Flow
-57.31M-359.00M-883.00M48.00M89.07M1.09B

Okta Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price105.08
Price Trends
50DMA
109.15
Negative
100DMA
104.12
Positive
200DMA
91.40
Positive
Market Momentum
MACD
-2.32
Positive
RSI
40.01
Neutral
STOCH
11.05
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OKTA, the sentiment is Neutral. The current price of 105.08 is below the 20-day moving average (MA) of 116.40, below the 50-day MA of 109.15, and above the 200-day MA of 91.40, indicating a neutral trend. The MACD of -2.32 indicates Positive momentum. The RSI at 40.01 is Neutral, neither overbought nor oversold. The STOCH value of 11.05 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for OKTA.

Okta Risk Analysis

Okta disclosed 60 risk factors in its most recent earnings report. Okta reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
We have in the past, and may in the future be subject to infringement claims, which could result in significant damage awards that could harm our results of operations. Q4, 2024

Okta Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$133.09B114.2221.16%13.91%-50.96%
80
Outperform
$80.32B43.19205.91%13.83%58.13%
79
Outperform
$116.75B721.64-5.76%25.94%-226.80%
NENET
74
Outperform
$62.28B-7.35%27.79%56.19%
ZSZS
74
Outperform
$47.18B-2.68%25.46%49.20%
65
Neutral
$18.40B163.142.08%13.51%
62
Neutral
$11.81B10.34-7.44%2.91%7.41%-7.93%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OKTA
Okta
105.08
15.97
17.92%
FTNT
Fortinet
104.94
44.85
74.64%
PANW
Palo Alto Networks
199.60
45.08
29.17%
ZS
Zscaler
303.03
119.12
64.77%
CRWD
CrowdStrike Holdings
468.41
93.84
25.05%
NET
Cloudflare
179.67
107.95
150.52%

Okta Corporate Events

Business Operations and StrategyFinancial Disclosures
Okta Reports Strong Q1 2026 Financial Results
Positive
May 27, 2025

On May 27, 2025, Okta announced its financial results for the first quarter of fiscal year 2026, ending April 30, 2025. The company reported a 12% increase in total revenue and subscription revenue year-over-year, with record GAAP and non-GAAP operating profitability. Okta’s remaining performance obligations grew by 21%, and the company achieved an operating cash flow of $241 million. The announcement underscores Okta’s focus on driving profitable growth and innovation in identity security solutions, with significant implications for its market positioning and stakeholder confidence.

The most recent analyst rating on (OKTA) stock is a Hold with a $81.00 price target. To see the full list of analyst forecasts on Okta stock, see the OKTA Stock Forecast page.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.