KeyBanc has revised its price target for Okta (OKTA, Financial), decreasing it to $140 from the previous $155, while maintaining an Overweight rating on the stock. This adjustment comes after Okta's Q1 current remaining performance obligation (cRPO) slightly surpassed expectations, but its Q2 cRPO guidance fell short. Despite this, the outlook for FY26 revenue remains stable, and the company has improved its free cash flow margin by one percentage point.
Okta's management highlighted a rise in macroeconomic uncertainty influenced by customer interactions post-quarter, prompting a more cautious stance in their guidance. This reflects a careful approach to future economic conditions while maintaining confidence in the company's long-term prospects.
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 $122.95 with a high estimate of $150.00 and a low estimate of $75.00. The average target implies an downside of 2.03% 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: May 27, 2025
- Revenue Growth (Q2 FY26): Expected growth of 10%.
- Current RPO Growth (Q2 FY26): Expected growth of 10% to 11%.
- Non-GAAP Operating Margin (Q2 FY26): Expected at 26%.
- Free Cash Flow Margin (Q2 FY26): Expected at approximately 19%.
- Revenue Growth (FY26): Expected growth of 9% to 10%.
- Non-GAAP Operating Margin (FY26): Expected at 25%.
- Free Cash Flow Margin (FY26): Expected at approximately 27%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Okta Inc (OKTA, Financial) reported strong financial performance in Q1 FY26, with record operating profitability and profit margin.
- The company experienced significant growth in its governance portfolio, with products like Okta Identity Governance and lifecycle management showing substantial adoption.
- Okta Inc (OKTA) saw a nearly 400% increase in workflow executions over the past three years, indicating strong integration into customer IT infrastructures.
- The company is making strides in innovation, particularly with new products like Identity Security Posture Management and Okta Privileged Access, which address evolving cyber threats.
- Okta Inc (OKTA) is well-positioned in the US public sector, with strong performance in Q1 and strategic investments yielding positive results.
Negative Points
- Okta Inc (OKTA) has introduced additional conservatism in its guidance due to macroeconomic uncertainties, which could impact future performance.
- The company is facing headwinds in net revenue retention (NRR), which has declined for the fourth consecutive quarter.
- There is potential uncertainty in the US federal vertical, which could affect Okta Inc (OKTA)'s federal business due to economic and political factors.
- Despite strong Q1 results, Okta Inc (OKTA) is cautious about the macroeconomic environment, which could impact growth in the latter half of FY26.
- The company's go-to-market specialization is still in early stages, and while initial signals are positive, the long-term success of this strategy remains to be seen.
