Okta (OKTA, Financial) shares dropped sharply, falling by 11% to close at $111.63. This decline followed the company's announcement of its first-quarter financial report and future outlook. The disappointing results and guidance have led investors to reassess their positions, prompting a notable sell-off in Okta's stock. The market's reaction highlights concerns over the company's current performance and its projections for the near future.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 38 analysts, the average target price for Okta Inc (OKTA, Financial) is $121.69 with a high estimate of $155.00 and a low estimate of $75.00. The average target implies an downside of 3.04% from the current price of $125.50. More detailed estimate data can be found on the Okta Inc (OKTA) Forecast page.
Based on the consensus recommendation from 45 brokerage firms, Okta Inc's (OKTA, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Okta Inc (OKTA, Financial) in one year is $97.80, suggesting a downside of 22.07% from the current price of $125.5. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Okta Inc (OKTA) Summary page.
OKTA Key Business Developments
Release Date: March 03, 2025
- Operating Margin Growth: Approximately 9 points increase for FY25.
- Free Cash Flow Margin Growth: 6 points increase for FY25.
- RPO Growth: Increased 25%, crossing the $4 billion mark.
- Total Contract Value: Record bookings in Q4, crossing $1 billion for the first time.
- Top 25 Deals Total Contract Value: Over $320 million in Q4.
- $1 Million-Plus ACV Customers: Grew 22% to 470 customers.
- Partner-Influenced Deals: Over 70% of deals in Q4 were partner influenced.
- AWS Marketplace Revenue Growth: Over 80% growth in FY25.
- Q1 FY26 Revenue Growth Outlook: Expected growth of 10%.
- Q1 FY26 Non-GAAP Operating Margin: Expected to be 25%.
- Q1 FY26 Free Cash Flow Margin: Expected to be approximately 25%.
- FY26 Revenue Growth Outlook: Expected growth of 9% to 10%.
- FY26 Non-GAAP Operating Margin: Expected to be 25%.
- FY26 Free Cash Flow Margin: Expected to be approximately 26%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Okta Inc (OKTA, Financial) reported strong Q4 results with record profitability and free cash flow.
- The company achieved record bookings in Q4, surpassing $1 billion in total contract value for the first time.
- Okta Inc (OKTA) saw significant growth in new products, with over 20% of Q4 bookings from innovations like Okta Identity Governance and Identity Threat Protection with Okta AI.
- The partnership with AWS Marketplace has been successful, with revenue from AWS Marketplace growing over 80% in FY25.
- Okta Inc (OKTA) experienced a multiyear high in sales productivity, with notable success in cross-selling workforce products to existing customers.
Negative Points
- The company faces ongoing macroeconomic challenges, with a consistent environment over the past couple of years.
- There is a noted headwind from seat-based pricing, as customers are now more conservative in their purchasing compared to previous years.
- Okta Inc (OKTA) has a cautious approach to forward guidance, factoring in go-to-market specialization and potential macroeconomic uncertainties.
- The company is undergoing a headcount reduction to optimize cost structure, which may impact short-term operations.
- Despite strong results, Okta Inc (OKTA) acknowledges the need for continued investment in product innovation and market expansion to maintain growth momentum.
