Okta Declines 5.6% Despite Better-Than-Expected Q4 Results

Okta, Inc. (OKTA) has delivered better-than-expected results for the fourth quarter of Fiscal 2022 (ended January 31, 2022) on the back of top-line growth. Shares of the company declined 5.6% in the extended trading session on Wednesday.

The company reported a loss of $0.18 per share against the consensus loss estimate of $0.24 per share. It had reported earnings of $0.06 per share in the same quarter last year. 

Additionally, total revenues of $383 million surpassed the Street’s estimate of $359.8 million and rose 63% year-over-year. Subscription revenue stood at $369.3 million, up 64%. On an Okta standalone basis (excluding $56 million attributable to Auth0), total revenue increased 39%.

The company recorded remaining performance obligations (RPO) of $2.69 billion, up 50% year-over-year, while total calculated billings, net of acquired deferred revenue, stood at $603 million, up 91%.

As of January 31, 2022, the company’s cash and cash equivalents, along with short-term investments, stood at $2.5 billion. 

The CEO of Okta, Todd McKinnon, said, “We exited FY22 with accelerating top-line metrics driven by strong execution and robust demand across our workforce solutions and both Okta and Auth0 customer identity solutions. Okta brings an unparalleled platform of cloud native identity management solutions to a massive market that continues to move towards us, propelled by the three mega-trends of cloud and hybrid IT, digital transformation, and zero trust security.”

Outlook 

For the first quarter of Fiscal 2023, the company projects total revenues to be in the range of $388 million to $390 million. Adjusted loss per share is expected between $0.35 and $0.34.  

For full Fiscal Year 2023, the company projects an adjusted loss in the range of $1.27 to $1.24 per share. Total revenues are expected between $1.78 billion and $1.79 billion.

Wall Street’s Take  

The Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 14 Buys and 5 Holds. The average Okta price target of $259.26 implies 41.9% upside potential from current levels. Shares have lost 24.3% over the past year. 

Bloggers Weigh In  

TipRanks data shows that financial blogger opinions are 90% Bullish on OKTA, compared to a sector average of 68%.

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