Okta Is 'Seeing Strength With Large Customers': 7 Of These 9 Analysts Raise Their Stock Forecast

Author: Priya Nigam | February 29, 2024 01:45pm

Okta Inc (NASDAQ:OKTA) shares were climbing in early trading on Thursday, after the company reported upbeat fourth-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

Canaccord Genuity On Okta

Analyst T. Michael Walkley maintained a Hold rating while raising the price target from $85 to $95.

Although Okta reported strong fourth-quarter results that came in ahead of expectations, its first-quarter guidance showed decelerating cRPO (current remaining performance obligations) growth of 13%, Walkley said in a note.

Management only modestly raised the fiscal 2025 revenue growth outlook from 10% to 10-11%, he noted.

“We still view Okta as a long-term beneficiary of Zero Trust adoption given its positioning as a next-gen leader and consolidator in a large $80B TAM for Identity Security,” the analyst further stated.

Truist Securities On Okta

Analyst Joel P. Fishbein Jr. reiterated a Hold rating while lifting the price target from $85 to $105.

Okta reported strong fourth-quarter results and revised its topline and profit guidance higher for fiscal 2025, Fishbein said.

“The company is seeing strength with large customers and is seeing success with uplift from its OIG and PAM solutions in Workforce Identity,” the analyst wrote. “OKTA is making progress in its GTM organization with a shift in strategy to accelerate new logo growth,” he added.

Mizuho Securities On Okta

Analyst Gregg Moskowitz reaffirmed a Neutral rating while raising the price target from $90 to $105.

“OKTA reported a clearly better than expected F4Q, led by cRPO growth of 16% Y/Y and revenue growth of 19% Y/Y vs. our and the Street's 15% forecast,” Moskowitz wrote in a note. “Additionally, OKTA noted healthy activity with large enterprises, and full-year guidance was raised,” he noted.

While Okta remained “a clear leader in the critically important identity management market,” the company continued to face increasing competition from Microsoft Corp (NASDAQ:MSFT), the analyst further stated.

BMO Capital Markets On Okta

Analyst Keith Bachman maintained a Market Perform rating while lifting the price target from $80 to $110.

Given Okta’s strong execution from enterprise deals, the fiscal 2025 guidance “appears conservative,” Bachman said.

“Even if considering the macro uncertainty and potential headwinds from the security breach in October, we think growth from 2Q to 4Q FY25 has upside potential to the guidance given the healthy pipeline,” he added.

Check out other analyst stock ratings.

Needham On Okta

Analyst Alex Henderson reiterated a Buy rating while raising the price target from $105 to $130.

Concerns around the recent hacks at Okta have impacted operations, Henderson said. He added, however, that the company delivered strong revenue growth of 19% in the quarter and a beat on operating margins and RPO.

“Management's guidance offered solid 16%-17% Revenue growth, strong Cash Flow, expanding Operating Margins, solid 10%+ cRPO growth at 13%, and EPS guidance of $0.54-$0.55 well ahead of the Street at $0.41,” the analyst further wrote.

RBC Capital Markets On Okta

Analyst Matthew Hedberg reaffirmed an Outperform rating while lifting the price target from $95 to $125.

“In a stabilizing macro environment, Okta delivered strong Q4/24 results relative to expectations, as management noted minimal quantifiable impact from the prior security incident,” Hedberg said in a note.

“The highlight was FY/25 guidance, which was slightly raised though it embeds conservatism around the security incident and macros, as additional upside seems likely,” he added.

JMP Securities On Okta

Analyst Trevor Walsh maintained a Market Perform rating on the stock.

“Okta delivered strong beats on the primary top-line metrics (revenue and cRPO) as well as profitability statistics (operating margin and free cash flow) allowing the company to achieve Rule of 40 status for FY24,” Walsh wrote.

“Okta raised the top-line guidance relative to consensus by 3% at the midpoint for the quarter and 1% for the year, respectively, with significantly raised operating margin and earnings expectations,” he further stated.

Oppenheimer On Okta

Analyst Ittai Kidron reiterated an Outperform rating while raising the price target to $125.

Okta reported a strong quarter, “driven by solid deal momentum for large customers (which drove a strong beat to 4Q cRPO guidance) and limited fallout from the recent security breach,” Kidron wrote.

“Overall, we come away positive, and see potential for upside to FY25 guidance behind further improvements in sales productivity from recent GTM changes (shift to hunter/farmer model for SMB reps, CIAM enablement training), which can drive a rebound in customer growth and improve upselling for Workforce and CIAM,” Kidron added.

KeyBanc Capital Markets On Okta

Analyst Eric Heath reaffirmed a Sector Weight rating on the stock.

Management noted minimal impact from the October security incident but retained conservatism in its full-year guidance, Heath said.

“We remain positive on identity being a high priority within security, Okta's ability to be a consolidator of identity, and there being several product catalysts (IGA, PAM, CIAM, ITDR),” he added.

OKTA Price Action: Shares of Okta had risen by 20.30% to $105.02 at the time of publication on Thursday.

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