Okta (OKTA) AI Stock Analysis

• Market Cap: $16.53B
• Dividend Yield: N/A
• Average Volume (3M): 3.48M
• Price to Earnings (P/E): 142.2
• Beta (1Y): 1.28
• Revenue Growth: 13.51%
• EPS Growth: N/A
• Country: US
• Employees: 5,914
• Sector: Technology
• Sector Strength: 90
• Industry: Software - Infrastructure
• EPS (TTM): 0.86
• Shares Outstanding: 167,163,420
• 10 Day Avg. Volume: 2,552,480
• 30 Day Avg. Volume: 3,481,106
• PEG Ratio: -1.38
• Price to Book (P/B): 37.03
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 542.20
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 1.52
• Enterprise Value/Gross Profit: 7.58
• Enterprise Value/Ebitda: 90.07
• 1Y Price Target: $124.50
• Price Target Upside: 35.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 35

• Rating: 63 Neutral
• Price Target: $98.00 ▲(7.03%Upside)

Okta's strong financial performance, highlighted by robust revenue growth and improved cash flow, is a major positive. However, the technical analysis indicates bearish momentum, and the high P/E ratio suggests the stock may be overvalued. The earnings call provided positive insights into profitability and product growth, but macroeconomic uncertainties and cautious guidance temper the outlook. These factors collectively result in a moderate overall stock score.

Positive Factors

Financial Performance

Operating income and free cash flow were substantially ahead of expectations.

Growth Opportunities

Opportunities for growth are present due to prioritization of identity security and a growing portfolio across Workforce and Customer Identity.

Profitability

Okta continues to make strides towards improving profitability, reporting record net income of $158mn and a healthy free cash flow margin of 35%.

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

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 Guidance

The company's Q2 CRPO guidance implies a decline, which is concerning as CRPO has never declined in a Q2 before.

Okta Business Overview & Revenue Model

Company Description

Okta, 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 Money

Okta 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 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

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

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

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	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.68B	2.61B	2.26B	1.86B	1.30B	835.42M
Gross Profit	2.06B	1.99B	1.68B	1.31B	903.80M	617.74M
EBITDA	154.00M	25.00M	-230.00M	-676.00M	-649.90M	-156.00M
Net Income	130.00M	28.00M	-355.00M	-815.00M	-848.41M	-266.33M
Balance Sheet
Total Assets	9.37B	9.44B	8.99B	9.31B	9.21B	3.30B
Cash, Cash Equivalents and Short-Term Investments	2.73B	2.52B	2.20B	2.58B	2.50B	2.59B
Total Debt	947.00M	952.00M	1.27B	2.33B	2.00B	1.95B
Total Liabilities	2.80B	3.03B	3.10B	3.84B	3.28B	2.60B
Stockholders Equity	6.57B	6.41B	5.89B	5.47B	5.92B	694.04M
Cash Flow
Free Cash Flow	760.00M	730.00M	488.00M	63.00M	87.36M	110.59M
Operating Cash Flow	772.00M	750.00M	512.00M	86.00M	104.12M	127.96M
Investing Cash Flow	-240.00M	-314.00M	441.00M	-130.00M	-366.81M	-1.31B
Financing Cash Flow	-102.27M	-359.00M	-883.00M	48.00M	89.07M	1.09B

Okta Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 91.56
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

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 91.56 is below the 20-day moving average (MA) of 98.09, below the 50-day MA of 108.02, and below the 200-day MA of 93.34, indicating a bearish trend. The MACD of -2.96 indicates Positive momentum. The RSI at 29.14 is Positive, neither overbought nor oversold. The STOCH value of 25.82 is Neutral, 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
FTNT	77 Outperform	$76.69B	40.77	205.91%	―	13.83%	58.13%
CRWD	74 Outperform	$121.41B	721.64	-5.76%	―	25.94%	-226.80%
PANW	74 Outperform	$124.95B	107.23	21.16%	―	13.91%	-50.96%
ZS	72 Outperform	$46.11B	―	-2.68%	―	25.46%	49.20%
NET	69 Neutral	$63.06B	―	-7.35%	―	27.79%	56.19%
Sector *	69 Neutral	¥229.01B	14.09	7.50%	2.69%	9.25%	8.21%
OKTA	63 Neutral	$16.53B	142.15	2.08%	―	13.51%	―

Okta Corporate Events

Okta Board Member Resigns Before Annual Meeting

On June 20, 2025, Benjamin Horowitz announced his resignation from Okta‘s Board of Directors, effective at the company’s annual meeting on June 24, 2025, leading to a reduction in board size from nine to eight. At the annual meeting, stockholders voted on four proposals, including the election of directors, ratification of Ernst & Young LLP as the independent auditor, approval of executive compensation, and the frequency of future votes on executive compensation, with decisions aligning with board recommendations.

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.

Okta Reports Strong Q1 2026 Financial Results

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.