tiprankstipranks
Trending News
More News >
Okta (OKTA)
NASDAQ:OKTA

Okta (OKTA) AI Stock Analysis

Compare
7,736 Followers

Top Page

OK

Okta

(NASDAQ:OKTA)

Rating:65Neutral
Price Target:
$113.00
▲(15.92%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 now counts 480 $1M+ ARR customers, with the fastest-growing cohort within this million-dollar-plus base.
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%.
Sales Strategy
Okta's GTM-specialization is beginning to pay dividends and energizing GTM morale.
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.
Guidance
Guidance suggests trends are likely to deteriorate further, with 2Q cRPO guidance of 11% growth compared to Street’s 14% implying QoQ deceleration versus the historical seasonal pattern of acceleration.
Revenue Growth
After Okta’s earnings the stock dropped over 15%, reflecting concerns over a thinner in-quarter revenue beat and no fiscal year raise, which implied lower future quarters.

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

Okta Business Overview & Revenue Model

Company DescriptionOkta, Inc. is a leading independent provider of identity management solutions for enterprises, focusing on securing user authentication and access to applications and devices. Operating in the cloud computing sector, Okta provides a robust identity platform for businesses, helping them manage and secure user identities and streamline access across various applications. Its core products and services include the Okta Identity Cloud, which consists of products like Single Sign-On (SSO), Multi-Factor Authentication (MFA), Universal Directory, and Lifecycle Management, catering to the needs of businesses looking to enhance security and user experiences.
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
Analyzes revenue across different business units, highlighting which segments are driving growth and where Okta might face challenges or opportunities.
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: -7.36%|
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
2.06B1.99B1.68B1.31B903.80M617.74M
EBIT
12.00M-74.00M-460.00M-783.00M-767.10M-204.16M
EBITDA
154.00M25.00M-230.00M-676.00M-649.90M-156.00M
Net Income Common Stockholders
130.00M28.00M-355.00M-815.00M-848.41M-266.33M
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.73B2.52B2.20B2.58B2.50B2.59B
Total Assets
9.37B9.44B8.99B9.31B9.21B3.30B
Total Debt
947.00M952.00M1.27B2.33B2.00B1.95B
Net Debt
453.00M543.00M932.00M2.07B1.74B1.51B
Total Liabilities
2.80B3.03B3.10B3.84B3.28B2.60B
Stockholders Equity
6.57B6.41B5.89B5.47B5.92B694.04M
Cash FlowFree Cash Flow
760.00M730.00M488.00M63.00M87.36M110.59M
Operating Cash Flow
772.00M750.00M512.00M86.00M104.12M127.96M
Investing Cash Flow
-240.00M-314.00M441.00M-130.00M-366.81M-1.31B
Financing Cash Flow
-102.27M-359.00M-883.00M48.00M89.07M1.09B

Okta Technical Analysis

Technical Analysis Sentiment
Negative
Last Price97.48
Price Trends
50DMA
108.46
Negative
100DMA
104.82
Negative
200DMA
91.45
Positive
Market Momentum
MACD
-4.03
Positive
RSI
31.79
Neutral
STOCH
6.60
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 97.48 is below the 20-day moving average (MA) of 110.64, below the 50-day MA of 108.46, and above the 200-day MA of 91.45, indicating a neutral trend. The MACD of -4.03 indicates Positive momentum. The RSI at 31.79 is Neutral, neither overbought nor oversold. The STOCH value of 6.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OKTA.

Okta Risk Analysis

Okta disclosed 61 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 0 New Risks

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
$131.81B112.3121.16%13.91%-50.96%
80
Outperform
$77.81B41.50205.91%13.83%58.13%
79
Outperform
$119.79B721.64-5.76%25.94%-226.80%
NENET
74
Outperform
$59.61B-7.35%27.79%56.19%
ZSZS
72
Outperform
$46.93B-2.68%25.46%49.20%
65
Neutral
$17.07B151.342.08%13.51%
62
Neutral
$11.80B10.08-7.46%2.99%7.37%-8.21%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OKTA
Okta
97.48
7.70
8.58%
FTNT
Fortinet
100.83
39.93
65.57%
PANW
Palo Alto Networks
196.27
36.47
22.82%
ZS
Zscaler
301.95
117.57
63.77%
CRWD
CrowdStrike Holdings
480.62
90.19
23.10%
NET
Cloudflare
171.97
94.29
121.38%

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
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.