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Okta
(NASDAQ:OKTA)
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Rating:73Outperform
Price Target:
$238.00
▲(82.22% Upside)
Action:Reiterated
Date:10/17/26
OKTA scores well on fundamentals, led by strong free cash flow, improved profitability, and a very conservative balance sheet. The earnings call reinforced this with solid growth/margin/FCF guidance and strong bookings/new-product traction. The score is held back by a demanding valuation (high P/E, no dividend) and a softer near-term technical picture (below the 20-day average with weaker momentum).
Positive Factors
Recurring SaaS Model
Okta’s subscription-based SaaS model creates recurring revenue and multiple expansion paths as customers add identities, applications, modules and security features. This supports retention, predictable cash generation and deeper embedding in enterprise technology environments over time.
Negative Factors
Decelerating Revenue Growth
Slower revenue growth reduces confidence that Okta can sustain its recent profitability inflection through operating leverage alone. If maturation or softer demand persists, expense discipline may need to carry more of the earnings improvement and expansion opportunities could become harder to realize.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring SaaS Model
Okta’s subscription-based SaaS model creates recurring revenue and multiple expansion paths as customers add identities, applications, modules and security features. This supports retention, predictable cash generation and deeper embedding in enterprise technology environments over time.
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
$37.25B
Dividend YieldN/A
Average Volume (3M)3.72M
Price to Earnings (P/E)126.1
Beta (1Y)1.09
Revenue Growth11.22%
EPS Growth74.46%
CountryUS
Employees6,366
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)1.69
Shares Outstanding167,139,760
10 Day Avg. Volume3,576,193
30 Day Avg. Volume3,722,733
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)2.12
Price to Sales (P/S)5.09
P/FCF Ratio17.22
Enterprise Value/Market Cap0.62
Enterprise Value/Revenue7.53
Enterprise Value/Gross Profit9.63
Enterprise Value/Ebitda56.15
Forecast
1Y Price Target
$216.97Price Target Upside66.12% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering34
EPS Forecast (FY)3.93
Revenue Forecast (FY)$3.22B
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, software-as-a-service (SaaS) identity products to organizations. Revenue is largely generated from recurring subscriptions where customers pay for access to Okta’s identity platform and spe...
Okta Earnings Call Summary
Earnings Call Date:Aug 26, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Dec 02, 2026
Earnings Call Sentiment Positive
The call conveyed broadly positive operational and financial momentum: record non-Q4 bookings, strong enterprise ACV growth, 30% of bookings from new products, and improving profitability and cash flow with healthy guidance. AI security and Okta for AI Agents are showing early customer traction, important partnerships, and strategic certifications (IL5, FedRAMP, HIPAA), but management emphasized AI monetization is still early and immaterial to FY '27 results. Short-term headwinds include a deliberate strategy to shift professional services to partners (about a 1-point revenue impact), ongoing market confusion among vendors, and evolving pricing/consumption models for agent workloads. On balance, positive operational execution, strong balance sheet and growing product breadth outweigh the early-stage uncertainties around AI revenue realization.Positive Updates
Record Non-Q4 Bookings and Strong Top-Line Momentum
Q2 was a record bookings quarter for a non-Q4, with acceleration in top-line metrics driven by pipeline conversion, deal expansions and sales productivity gains. Management cited a strong first half of FY '27 and momentum across core workforce and customer identity businesses.
Negative Updates
AI Revenue Still Nascent / Immature Contribution
Despite dozens of AI deals and several million-dollar wins, management stated AI revenue remains immaterial for FY '27 and is still early-stage; Okta for AI Agents was described as too small yet to show up materially in financials.
Read all updates
Q2-2027 Updates
Positive
Negative
Record Non-Q4 Bookings and Strong Top-Line Momentum
Q2 was a record bookings quarter for a non-Q4, with acceleration in top-line metrics driven by pipeline conversion, deal expansions and sales productivity gains. Management cited a strong first half of FY '27 and momentum across core workforce and customer identity businesses.
Read all positive updates
Company Guidance
Okta's forward guidance: for Q3 FY‑27 the company expects total revenue growth of 10%, current RPO growth of 11–12%, non‑GAAP operating margin of 24–25% and free cash flow margin of 21–23%; for full‑year FY‑27 it now expects total revenue growth of 10–11%, a non‑GAAP operating margin of 26% and a free cash flow margin of 28–29%. Management noted the FY‑27 revenue outlook reflects roughly a 1‑point headwind from shifting more professional services to GSI partners (professional services were ~1% of revenue in Q2), and the FY‑27 FCF margin includes about a 1‑point impact from lower interest income tied to share repurchases and the cash settlement of maturing notes; at quarter‑end Okta held ~ $2.3B in cash/cash equivalents/short‑term investments, repurchased ~1.5M shares for ~$125M (with ~$555M remaining on a $1B program) and settled $350M of convertible note principal.Okta Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
92
Very Positive
Cash Flow
88
Very Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.07B | 2.92B | 2.61B | 2.26B | 1.86B | 1.30B |
| Gross Profit | 2.40B | 2.26B | 1.99B | 1.68B | 1.31B | 904.00M |
| EBITDA | 412.00M | 355.00M | 149.00M | -245.00M | -676.00M | -651.00M |
| Net Income | 296.00M | 235.00M | 28.00M | -355.00M | -815.00M | -848.00M |
Balance Sheet | ||||||
| Total Assets | 9.14B | 9.71B | 9.44B | 8.99B | 9.31B | 9.21B |
| Cash, Cash Equivalents and Short-Term Investments | 2.30B | 2.55B | 2.52B | 2.20B | 2.58B | 2.50B |
| Total Debt | 53.00M | 422.00M | 952.00M | 1.30B | 2.37B | 2.03B |
| Total Liabilities | 2.17B | 2.71B | 3.03B | 3.10B | 3.84B | 3.28B |
| Stockholders Equity | 6.97B | 7.00B | 6.41B | 5.89B | 5.47B | 5.92B |
Cash Flow | ||||||
| Free Cash Flow | 972.00M | 863.00M | 730.00M | 488.00M | 63.00M | 87.00M |
| Operating Cash Flow | 987.00M | 884.00M | 750.00M | 512.00M | 86.00M | 104.00M |
| Investing Cash Flow | 346.00M | 271.00M | -314.00M | 441.00M | -130.00M | -367.00M |
| Financing Cash Flow | -1.45B | -720.00M | -359.00M | -883.00M | 48.00M | 89.00M |
Okta Technical Analysis
Positive
130.61
Price Trends
185.00
Positive
160.13
Positive
121.34
Positive
Market Momentum
4.25
Positive
56.22
Neutral
47.31
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 130.61 is below the 20-day moving average (MA) of 210.79, below the 50-day MA of 185.00, and above the 200-day MA of 121.34, indicating a bullish trend. The MACD of 4.25 indicates Positive momentum. The RSI at 56.22 is Neutral, neither overbought nor oversold. The STOCH value of 47.31 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $3.90T | 29.14 | 33.22% | 0.69% | 17.79% | 31.42% | |
73 Outperform | $37.25B | 126.07 | 4.26% | ― | 11.22% | 74.46% | |
72 Outperform | $12.44B | -64.09 | -2.88% | ― | 20.13% | 70.24% | |
65 Neutral | $381.47B | 19.47 | 42.58% | 1.59% | 21.62% | 45.95% | |
65 Neutral | $41.60B | -654.23 | -2.76% | ― | 25.42% | -47.39% | |
62 Neutral | $9.92B | -12.85 | -434.99% | ― | 30.40% | -124.09% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
OKTA
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220.01
130.00
144.43%
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Okta Corporate Events
Business Operations and StrategyExecutive/Board Changes
Okta Adds AI-Focused Finance Leader to Board
Positive
Sep 18, 2026
On September 14, 2026, Okta director Emilie Choi resigned from the board, with the company noting her departure was not due to any disagreement over operations, policies, or practices. The board expressed appreciation for her contributions, unders...
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.