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Okta (OKTA)
NASDAQ:OKTA
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Okta (OKTA) AI Stock Analysis

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OKTA

Okta

(NASDAQ:OKTA)

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Neutral 69 (OpenAI - 4o)
Rating:69Neutral
Price Target:
$104.00
▲(11.47% Upside)
Okta's overall stock score is driven by a positive earnings call and stable technical indicators, despite high valuation concerns. The company's improved profitability and strategic initiatives, such as the acquisition of Acxiom Security, contribute to a favorable outlook. However, the high P/E ratio and declining revenue growth rate are significant risks.
Positive Factors
Strategic Acquisitions
The acquisition of Acxiom Security enhances Okta's capabilities in privileged access management, strengthening its product offerings and competitive position in securing critical infrastructure, which is crucial for long-term growth and market leadership.
Public Sector Growth
Strong performance in the public sector, particularly with significant contracts like the Department of Defense, indicates Okta's growing influence and reliability in a stable and lucrative market, supporting sustained revenue growth.
Revenue and Margin Guidance
Increased revenue and margin guidance reflect Okta's confidence in its business strategy and operational efficiency, suggesting a positive outlook for financial performance and shareholder value in the coming fiscal year.
Negative Factors
Decline in Revenue Growth
A significant decline in revenue growth can indicate challenges in market expansion or competitive pressures, potentially affecting Okta's ability to maintain its growth trajectory and market share over the long term.
Free Cash Flow Decline
A decline in free cash flow growth can limit Okta's ability to invest in new opportunities or weather economic downturns, impacting its financial flexibility and ability to sustain long-term growth initiatives.
Challenges in Federal Vertical
Challenges in the federal vertical, including contract restructuring and procurement delays, may hinder Okta's growth in this sector, affecting its ability to capitalize on government contracts and impacting revenue stability.

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 generates revenue primarily through a subscription-based model, offering various pricing tiers based on the number of users and the level of service required. The company's key revenue streams include subscriptions to its identity management platform and associated services, which are billed annually. Additionally, Okta benefits from upselling and cross-selling opportunities with existing customers by introducing new features or products. The company has established significant partnerships with major technology providers, such as Microsoft, AWS, and Google, which contribute to its earnings by integrating Okta's services with widely used platforms and expanding its customer base. Furthermore, Okta's focus on enterprise clients allows it to secure long-term contracts, providing a steady stream of recurring revenue.

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:Aug 26, 2025
(Q2-2026)
|
% Change Since: |
Next Earnings Date:Nov 26, 2025
Earnings Call Sentiment Positive
The earnings call reflects a predominantly positive outlook for Okta, with strong Q2 performance, significant growth in the public sector, a robust pipeline, and strategic acquisitions driving future potential. Despite minor challenges in the federal vertical and stabilization of NRR, the overall sentiment is optimistic, with raised revenue and margin guidance for FY 2026.
Q2-2026 Updates
Positive Updates
Strong Q2 Results and Growth in Public Sector
Okta reported solid Q2 results with significant strength in the public sector market. Five of the top 10 deals were with the US public sector, including their largest deal of the quarter with the Department of Defense.
Record Pipeline Generation
Okta achieved an all-time high in pipeline generation for Q2, indicating strong future growth potential. This was attributed to the specialization of sales teams and improved sales productivity.
Increased Revenue and Margin Guidance for FY 2026
Okta raised its full-year fiscal 2026 guidance, expecting total revenue growth of 10% to 11%, a non-GAAP operating margin of 25% to 26%, and a free cash flow margin of approximately 28%.
Strategic Acquisition of Acxiom Security
Okta announced the acquisition of Acxiom Security, a modern PAM vendor, to enhance their privileged access management capabilities and secure critical infrastructure.
Introduction of Cross-App Access Standard
Okta introduced a new open standard called cross-app access to control access for AI agents, gaining strong interest from partners like AWS, Zoom, and Box.
Negative Updates
Challenges in Federal Vertical
Despite strong results, Okta experienced some contract restructuring with civilian agencies and delays in procurement processes within the federal vertical.
Stabilization of Net Revenue Retention (NRR)
NRR has stabilized at 106%, with ongoing concerns about down-sell pressures, although these are expected to subside in the latter half of the fiscal year.
Company Guidance
During Okta's second quarter fiscal 2026 earnings webcast, the company provided several key financial metrics and guidance for future performance. Okta reported a solid Q2 with highlights including improved sales productivity and record pipeline generation. The company continues to see strong performance in its public sector business, with five of their top ten deals in Q2 involving the US public sector, including the Department of Defense. Okta's financial outlook for Q3 and FY 2026 is optimistic, with expectations for total revenue growth of 9-10% for Q3 and 10-11% for the full fiscal year. The company anticipates a non-GAAP operating margin of 22% for Q3 and 25-26% for FY 2026, with a free cash flow margin of approximately 28% for the full year. Okta has removed previous conservatism in its outlook related to macroeconomic uncertainty and federal verticals, highlighting its confidence in its go-to-market strategies and improved specialization efforts. Additionally, the company announced a definitive agreement to acquire Acxiom Security, aiming to enhance its privileged access management capabilities.

Okta Financial Statement Overview

Summary
Okta's financial statements reflect a company in transition. While profitability and operational efficiency have improved, the decline in revenue growth and free cash flow are areas of concern. The balance sheet remains strong with low leverage, providing a solid foundation for future growth. Continued focus on revenue generation and cash flow management will be crucial for sustaining this positive momentum.
Income Statement
65
Positive
Okta's income statement shows a mixed performance. The company has achieved a positive net profit margin of 4.96% in the TTM, a significant improvement from previous losses, indicating a turnaround in profitability. However, the revenue growth rate has declined by 24.07% in the TTM, which is a concern. Gross profit margin remains strong at 76.90%, showcasing efficient cost management. The EBIT and EBITDA margins have also improved, reflecting better operational efficiency.
Balance Sheet
70
Positive
The balance sheet of Okta is relatively stable with a low debt-to-equity ratio of 0.14 in the TTM, indicating low financial leverage. Return on equity has improved to 2.10%, showing better utilization of shareholder funds. The equity ratio is healthy, suggesting a strong capital structure. However, the company needs to maintain this trajectory to ensure long-term financial stability.
Cash Flow
60
Neutral
Okta's cash flow statement reveals some challenges. The free cash flow growth rate has declined by 41.79% in the TTM, which could impact future investments. However, the operating cash flow to net income ratio is robust at 168.27, indicating strong cash generation relative to net income. The free cash flow to net income ratio is nearly 1, showing efficient cash conversion.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue2.76B2.61B2.26B1.86B1.30B835.00M
Gross Profit2.13B1.99B1.68B1.31B904.00M617.00M
EBITDA281.00M139.00M-245.00M-676.00M-651.00M-156.00M
Net Income168.00M28.00M-355.00M-815.00M-848.00M-266.00M
Balance Sheet
Total Assets9.55B9.44B8.99B9.31B9.21B3.30B
Cash, Cash Equivalents and Short-Term Investments2.86B2.52B2.20B2.58B2.50B2.56B
Total Debt940.00M952.00M1.30B2.37B2.03B1.97B
Total Liabilities2.80B3.03B3.10B3.84B3.28B2.60B
Stockholders Equity6.75B6.41B5.89B5.47B5.92B694.04M
Cash Flow
Free Cash Flow838.00M730.00M488.00M63.00M87.00M111.00M
Operating Cash Flow853.00M750.00M512.00M86.00M104.00M128.00M
Investing Cash Flow-158.00M-314.00M441.00M-130.00M-367.00M-1.30B
Financing Cash Flow-339.00M-359.00M-883.00M48.00M89.00M1.09B

Okta Technical Analysis

Technical Analysis Sentiment
Positive
Last Price93.30
Price Trends
50DMA
92.66
Positive
100DMA
98.28
Negative
200DMA
98.22
Negative
Market Momentum
MACD
0.21
Negative
RSI
52.82
Neutral
STOCH
68.73
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 93.3 is above the 20-day moving average (MA) of 91.96, above the 50-day MA of 92.66, and below the 200-day MA of 98.22, indicating a neutral trend. The MACD of 0.21 indicates Negative momentum. The RSI at 52.82 is Neutral, neither overbought nor oversold. The STOCH value of 68.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$65.74B34.24165.17%14.46%48.06%
70
Neutral
$75.51B-11.04%27.32%-11.94%
69
Neutral
$16.45B110.012.61%12.68%
67
Neutral
$48.35B-2.70%23.31%31.04%
66
Neutral
$122.94B721.64-8.99%23.46%-270.07%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
53
Neutral
$13.09B-11.15%25.99%-25.47%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OKTA
Okta
93.30
21.49
29.93%
FTNT
Fortinet
85.79
8.31
10.73%
ZS
Zscaler
305.41
133.28
77.43%
CRWD
CrowdStrike Holdings
489.88
202.91
70.71%
NET
Cloudflare
216.67
136.18
169.19%
SAIL
SailPoint, Inc.
23.52
-1.03
-4.20%
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.Date of analysis: Oct 03, 2025