Okta (OKTA) Predictability Rank

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What is Okta Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Okta Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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Okta (OKTA) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Okta Inc (NAS:OKTA) » Definitions » Predictability Rank

Comparable Companies

GEN GDDY DOX IOT DBX FFIV NTNX PATH TOST CFLT MSFT ORCL ADBE PANW SNPS VMW FTNT CRWD PLTR SPLK

Traded in Other Exchanges

OKTA:Mexico 0OK:Germany 0OK:Germany O1KT34:Brazil

Address

100 First Street, Suite 600, San Francisco, CA, USA, 94105

Website

https://www.okta.com

Okta is a cloud-native security company that focuses on identity and access management. The San Francisco-based firm went public in 2017 and focuses on two key client stakeholder groups: workforces and customers. Okta's workforce offerings enable a company's employees to securely access its cloud-based and on-premises resources. The firm's customer offerings allow its clients' customers to securely access the client's applications.

Executives

Larissa Schwartz	officer: See Remarks	C/O OKTA, INC., 100 FIRST STREET, SUITE 600, SAN FRANCISCO CA 94105
Jacques Frederic Kerrest	director, officer: Chief Operating Officer	C/O OKTA, INC., 301 BRANNAN STREET 1ST FLOOR, SAN FRANCISCO CA 94107
Shibu Ninan	officer: Chief Accounting Officer	C/O OKTA, INC., 100 FIRST STREET, SUITE 600, SAN FRANCISCO CA 94105
Brett Tighe	officer: See Remarks	C/O OKTA, INC., 100 FIRST STREET, SUITE 600, SAN FRANCISCO CA 94105
Todd Mckinnon	director, 10 percent owner, officer: Chief Executive Officer	C/O OKTA, INC., 301 BRANNAN STREET 1ST FLOOR, SAN FRANCISCO CA 94107
Jonathan T Runyan	officer: General Counsel and Secretary	C/O OKTA, INC., 301 BRANNAN STREET 1ST FLOOR, SAN FRANCISCO CA 94107
Ledger Susan St.	officer: See Remarks	C/O OKTA, INC., 100 FIRST STREET, SUITE 600, SAN FRANCISCO CA 94105
Dixon Robert L Jr	director	120 MONUMENT CIRCLE, INDIANAPOLIS IN 46204
Emilie Choi	director	C/O COINBASE GLOBAL, INC., 100 PINE STREET, SUITE 1250, SAN FRANCISCO CA 94111
Christopher K Kramer	officer: Chief Accounting Officer	C/O OKTA, INC., 100 FIRST STREET, SUITE 600, SAN FRANCISCO CA 94105
Benjamin A Horowitz	director, 10 percent owner	2865 SAND HILL ROAD #101, MENLO PARK CA 94025
Jeff Epstein	director	C/O PRICELINE COM INC, 800 CONNECTICUT AVENUE, NORWALK CT 06854
Michael R Kourey	director
William E Losch	officer: Chief Financial Officer	DREAMWORKS ANIMATION SKG, INC., 1000 FLOWER STREET, GLENDALE CA 91201
Charles Race	officer: See Remarks	C/O INFORMATICA CORPORATION, 2100 SEAPORT BOULEVARD, REDWOOD CITY CA 94063