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Okta
(NASDAQ:OKTA)
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Rating:74Outperform
Price Target:
$167.00
▲(131.14% Upside)
Action:Upgraded
Date:06/24/26
OKTA scores well on improving financial performance (profitability swing, strong margins, low leverage) and constructive technical momentum (price above major moving averages with positive MACD). The primary constraint is valuation (very high P/E with no dividend support), while the latest earnings call adds support via solid margin/FCF guidance and improving retention, tempered by near-term headwinds and AI monetization cost/pricing uncertainty.
Positive Factors
Recurring subscription model and platform stickiness
A subscription-based, modular identity platform drives durable recurring revenue and expansion potential as customers add users or modules. This business model produces high retention, predictable renewals, and cross-sell upside, supporting sustained revenue visibility and long-term customer lifetime value.
Negative Factors
AI monetization uncertainty and adoption friction
While AI agent products generate large pipeline and bigger deal sizes, their early-stage status means revenue contribution is uncertain. Prolonged adoption curves, required product maturity, and evolving customer policies could delay material monetization and compress expected long-term returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring subscription model and platform stickiness
A subscription-based, modular identity platform drives durable recurring revenue and expansion potential as customers add users or modules. This business model produces high retention, predictable renewals, and cross-sell upside, supporting sustained revenue visibility and long-term customer lifetime value.
Read all positive factors
Okta Key Performance Indicators (KPIs)
Any
Remaining Performance Obligations
Represents contracted but unrecognized revenue from multi‑period subscriptions and services, giving visibility into near‑term revenue already booked. A rising RPO for Okta points to healthy future cash flow and strong contract demand; a drop may signal weakening bookings or renewal pressure.
Represents contracted but unrecognized revenue from multi‑period subscriptions and services, giving visibility into near‑term revenue already booked. A rising RPO for Okta points to healthy future cash flow and strong contract demand; a drop may signal weakening bookings or renewal pressure.
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The Fly
The FlyOkta (OKTA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$25.87B
Dividend YieldN/A
Average Volume (3M)4.45M
Price to Earnings (P/E)99.5
Beta (1Y)1.07
Revenue Growth11.75%
EPS Growth85.38%
CountryUS
Employees5,914
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)1.40
Shares Outstanding166,119,890
10 Day Avg. Volume2,976,673
30 Day Avg. Volume4,453,015
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)2.12
Price to Sales (P/S)5.09
P/FCF Ratio16.42
Enterprise Value/Market Cap0.71
Enterprise Value/Revenue6.15
Enterprise Value/Gross Profit7.94
Enterprise Value/Ebitda51.18
Forecast
1Y Price Target
$123.72Price Target Upside71.24% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering33
EPS Forecast (FY)3.85
Revenue Forecast (FY)$3.20B
Okta Business Overview & Revenue Model
Company Description
Okta, Inc. delivers comprehensive identity management solutions tailored for a diverse clientele, including large corporations, small and medium-sized businesses, educational institutions, charitable organizations, and governmental bodies, operati...
How the Company Makes Money
Okta primarily makes money by selling subscription-based access to its cloud identity platform. Revenue is largely recurring and generally driven by (1) Workforce Identity subscriptions sold to enterprises and other organizations for employees, co...
Okta Earnings Call Summary
Earnings Call Date:May 28, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Sep 02, 2026
Earnings Call Sentiment Positive
Okta reported a strong start to FY27 with broad-based go-to-market improvements, healthy cash reserves, meaningful enterprise traction (large customer mix) and rapid pipeline build — particularly around AI agent products and integrations with major platform partners. The AI products are driving outsized deal sizes and strategic pull-through for other products, but remain early and not yet material to revenue. Near-term headwinds include a ~1-point revenue impact from shifting professional services to partners, ~$350M convertible note settlement next month, modest FCF margin pressure from capital actions, adoption/pricing uncertainty for agent economics, and rising AI inference costs. Overall, upside potential from the large AI pipeline and product momentum outweighs the early-stage limitations and near-term execution items.Positive Updates
Top-line Growth and Retention Inflection
Q1 revenue growth of ~12% year-over-year with net retention inflecting to ~107% and cRPO growth of ~12%, indicating strengthening customer engagement and durable demand.
Negative Updates
AI Products Early — Limited Near-Term Revenue Contribution
Management emphasized Okta for AI agents and Auth0 for AI agents are early-stage: they drove strong pipeline but were not materially contributing to Q1 revenue and were only a small component of guidance.
Read all updates
Q1-2027 Updates
Positive
Negative
Top-line Growth and Retention Inflection
Q1 revenue growth of ~12% year-over-year with net retention inflecting to ~107% and cRPO growth of ~12%, indicating strengthening customer engagement and durable demand.
Read all positive updates
Company Guidance
Okta guided Q2 FY27 to 9% total revenue growth, 11% current RPO growth, a non‑GAAP operating margin of 26% and a free cash flow margin of 20–21%. For full FY27 management expects 9–10% total revenue growth, a non‑GAAP operating margin of 25–26% and a free cash flow margin of 27–28%; they said the FY27 revenue outlook reflects ~1 percentage‑point headwind from shifting more professional services to partners and the FCF margin includes ~1 point from lower interest income tied to share repurchases and the planned $350M cash settlement of maturing convertible notes. Additional balance‑sheet and capital‑allocation metrics: ~$2.6B in cash, cash equivalents and short‑term investments at quarter end, just over 3M shares repurchased and retired for $241M (with $680M remaining under the $1B repurchase program).Okta Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
86
Very Positive
Cash Flow
70
Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.00B | 2.92B | 2.61B | 2.26B | 1.86B | 1.30B |
| Gross Profit | 2.32B | 2.26B | 1.99B | 1.68B | 1.31B | 904.00M |
| EBITDA | 360.00M | 355.00M | 149.00M | -245.00M | -676.00M | -651.00M |
| Net Income | 247.00M | 235.00M | 28.00M | -355.00M | -815.00M | -848.00M |
Balance Sheet | ||||||
| Total Assets | 9.35B | 9.71B | 9.44B | 8.99B | 9.31B | 9.21B |
| Cash, Cash Equivalents and Short-Term Investments | 2.59B | 2.55B | 2.52B | 2.20B | 2.58B | 2.50B |
| Total Debt | 411.00M | 422.00M | 952.00M | 1.30B | 2.37B | 2.03B |
| Total Liabilities | 2.45B | 2.71B | 3.03B | 3.10B | 3.84B | 3.28B |
| Stockholders Equity | 6.90B | 7.00B | 6.41B | 5.89B | 5.47B | 5.92B |
Cash Flow | ||||||
| Free Cash Flow | 901.00M | 905.00M | 730.00M | 488.00M | 63.00M | 87.00M |
| Operating Cash Flow | 920.00M | 914.00M | 750.00M | 512.00M | 86.00M | 104.00M |
| Investing Cash Flow | 313.00M | 271.00M | -314.00M | 441.00M | -130.00M | -367.00M |
| Financing Cash Flow | -968.00M | -750.00M | -359.00M | -883.00M | 48.00M | 89.00M |
Okta Technical Analysis
Positive
72.25
Price Trends
108.80
Positive
92.40
Positive
90.21
Positive
Market Momentum
10.47
Negative
61.86
Neutral
72.44
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 72.25 is below the 20-day moving average (MA) of 128.81, below the 50-day MA of 108.80, and below the 200-day MA of 90.21, indicating a bullish trend. The MACD of 10.47 indicates Negative momentum. The RSI at 61.86 is Neutral, neither overbought nor oversold. The STOCH value of 72.44 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 58 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $119.96B | 60.61 | 155.65% | ― | 15.75% | 6.24% | |
75 Outperform | $202.02B | -3,943.68 | -0.58% | ― | 23.17% | 73.57% | |
74 Outperform | $25.87B | 99.48 | 3.59% | ― | 11.75% | 85.38% | |
68 Neutral | $23.79B | -291.18 | -3.71% | ― | 24.61% | -91.58% | |
67 Neutral | $97.94B | -1,077.93 | -6.23% | ― | 31.55% | -4.50% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $8.42B | -51.11 | -2.30% | ― | 23.96% | 78.71% |
* Technology Sector Average
OKTA
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Okta Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Okta Stockholders Approve Equity Plan Changes, Governance Slate
Positive
Jun 23, 2026
At its June 18, 2026 annual meeting, Okta stockholders approved an amendment to the company’s 2017 Equity Incentive Plan, a move that removes the plan’s termination date, eliminates the automatic annual “evergreen” share in...
Business Operations and StrategyFinancial Disclosures
Okta Posts Solid Q1 Results, Highlights Identity Momentum
Positive
May 28, 2026
On May 28, 2026, Okta reported first-quarter fiscal 2027 results for the period ended April 30, 2026, posting total revenue of $765 million and subscription revenue of $750 million, both up 11% year-over-year, alongside 16% growth in remaining per...
Executive/Board Changes
Okta Announces Planned Transition of Chief Legal Officer
Neutral
Apr 22, 2026
On April 22, 2026, Okta, Inc. announced that Chief Legal Officer and Corporate Secretary Larissa Schwartz intends to leave her role effective July 31, 2026, under a transition and separation agreement dated April 21, 2026. She will remain in her c...
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.