Identity and access management company Okta (NASDAQ:OKTA) was hit with a cyber attack that led the management to bolster its security environment and push the launch dates for the new products and features. As the incident could hurt its financials and share price, one shouldn’t be surprised, as a careful examination of the company’s risk disclosures indicates that Okta had previously acknowledged its vulnerability to increasing cybersecurity risks. Additionally, TipRanks’ Risk Analysis tool hinted at it.
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TipRanks’ Risk Analysis tool shows that Okta’s Tech and Innovation risk exposure (cyber security is part of Tech and Innovation Risk) is higher than the industry average. It accounts for 21.2% of its total risks, higher than the sector average of 20.3%.
Okta is allocating considerable resources to enhance the security of its product environment. In recent weeks, the company has implemented various measures to bolster its cybersecurity, including initiating a targeted security action plan and collaborating with third-party security firms. With this background, let’s look at what the Street recommends for Okta stock.
What is the Future of Okta Stock?
Wall Street holds a cautiously optimistic outlook on OKTA stock. However, following the release of Q3 results on November 29 and the revelation that the recent breach had a broader impact than initially anticipated, Piper Sandler analyst Rob Owens downgraded Okta from Buy to Hold. Additionally, he revised the price target downward from $95 to $75.
Okta stock has 14 Buy, 12 Hold, and two Sell recommendations for a Moderate Buy consensus rating. Further, analysts’ average OKTA stock price target of $87.96 implies 24.29% upside potential from current levels.
Bottom Line
The recent Okta incident underscores the importance of thoroughly identifying and analyzing risk factors before making investment decisions. Diligent scrutiny of risk profiles lowers the likelihood of future disappointments.
However, as the risk landscape for enterprises continues to evolve, investors face challenges in staying abreast of these changes. Additionally, the Securities and Exchange Commission’s (SEC) new regulations mandating public companies to report cyberattacks through regulatory filings within four business days of determining the attack’s material impact on operations will further complicate the assessment of scope and effect.
Nonetheless, by utilizing TipRanks’ dynamic Risk Analysis tool, investors can now evaluate the risks associated with a specific stock and stay informed about the evolving risk landscape. As for OKTA stock, analysts’ consensus rating suggests potential investors should take caution before investing.
