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I last profiled Okta (OKTA - Free Report) as the Bull of the Day in mid-October as shares slid to $50 per share.
It's time to revisit this Zacks #1 Rank again after more positive moves in earnings estimates from analysts.
Okta is an $11 billion provider of identity security for enterprises. This is a key service where password security is a continuous vulnerability point.
Primary products consist of Okta IT and Okta for Developers. Okta IT Products include Single Sign-On, Mobility Management, Adaptive Multi-Factor Authentication, Lifecycle Management and Universal Directory.
Okta for Developers includes Complete Authentication, User Management, Application Programming Interface Access Management and Developer Tools.
Here's what I wrote in October as shares collapsed to $50...
Estimates Higher, Stock Clobbered After Quarter Confusion and Management Moves
On August 31, Okta reported second-quarter fiscal 2023 adjusted loss of 10 cents per share, beating the Zacks Consensus Estimate by 66.67%. The company had reported a loss of 11 cents per share in the year-ago quarter.
Total revenues surged 43.2% year over year to $451.8 million and surpassed the consensus mark by 4.93%. The upside can be attributed to higher subscription revenues.
Subscription revenues (96.4% of total revenues) surged 43.6% year over year to $435.4 million. Professional services and other revenues (3.6% of total revenues) increased 32.7% year over year to $16.4 million.
While the company's Q2 revenue was solid, leading indicators slipped and expectations for second half billings were lowered as Okta is facing some sales integration challenges with the recent Auth0 acquisition, with heightened attrition and some product confusion, to say nothing of a surprising sabbatical announcement from the COO.
And the implied growth of 19% from management projections is down from 27%.
OKTA shares got hit for 34% on September 1 after this report.
(end of October article excerpt)
What was so interesting after this quarter is how much the analysts retreated.
While 2022 EPS estimates naturally had to move higher on the big positive earnings surprise, there were upward revisions into 2023 too despite the company re-evaluating out-year targets.
In October, I noted that "Next year's consensus leaped higher from a loss of 60-cents to a loss of only 31-cents. But analysts also downgraded the stock across the board on other factors."
And what we saw was a herd of analysts lowering their estimates and growth expectations.
But now, after the most recent quarterly report, the spreadsheet jockeys are changing their tune...
Okta price target raised to $90 from $80 at Piper Sandler
Analyst Rob Owens continues to see multiple opportunities across his software universe, saying valuations appear "relatively de-risked and underlying trends prove resilient." However, he believes there is still more bad news to come, especially on the economic front. As such, 2023 "potentially sets up as a stock picker's year," Owens tells investors in a research note. His top five ideas include Okta (OKTA - Free Report) , Palo Alto (PANW), Crowdstrike (CRWD), ServiceNow (NOW) and CyberArk (CYBR).
Okta price target raised to $80 from $72 at KeyBanc
Analyst Michael Turits raised the firm's price target on Okta to $80 from $72 to reflect conversations with the channel and CIO respondents, and to reflect his updated outlook following survey response data. The analyst keeps an Overweight rating on the shares.
As you can see, the prospects for this key provider of "identity security" have rebounded considerably.
I will reiterate the same thing I wrote 3 months ago when I saw the value...
Bottom line on OKTA: With its unique market position, and buoyant topline growth of 28%, Okta should be a good long-term investment as it falls back to levels not seen since December of 2018.
What's changed is that EPS estimates for this year have done a complete 180 -- from projected losses of 32-cents to PROFITS of 31-cents!
This represents a 200%+ flip in profitability!
And this is derived from the topline climbing an unexpected leap above $2 billion, representing 16% growth.
New bottom line for OKTA: Shares look poised to breakout above $70-75 very soon. I would be on-board!
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Bull of the Day: Okta (OKTA)
I last profiled Okta (OKTA - Free Report) as the Bull of the Day in mid-October as shares slid to $50 per share.
It's time to revisit this Zacks #1 Rank again after more positive moves in earnings estimates from analysts.
Okta is an $11 billion provider of identity security for enterprises. This is a key service where password security is a continuous vulnerability point.
Primary products consist of Okta IT and Okta for Developers. Okta IT Products include Single Sign-On, Mobility Management, Adaptive Multi-Factor Authentication, Lifecycle Management and Universal Directory.
Okta for Developers includes Complete Authentication, User Management, Application Programming Interface Access Management and Developer Tools.
Here's what I wrote in October as shares collapsed to $50...
Estimates Higher, Stock Clobbered After Quarter Confusion and Management Moves
On August 31, Okta reported second-quarter fiscal 2023 adjusted loss of 10 cents per share, beating the Zacks Consensus Estimate by 66.67%. The company had reported a loss of 11 cents per share in the year-ago quarter.
Total revenues surged 43.2% year over year to $451.8 million and surpassed the consensus mark by 4.93%. The upside can be attributed to higher subscription revenues.
Subscription revenues (96.4% of total revenues) surged 43.6% year over year to $435.4 million. Professional services and other revenues (3.6% of total revenues) increased 32.7% year over year to $16.4 million.
While the company's Q2 revenue was solid, leading indicators slipped and expectations for second half billings were lowered as Okta is facing some sales integration challenges with the recent Auth0 acquisition, with heightened attrition and some product confusion, to say nothing of a surprising sabbatical announcement from the COO.
And the implied growth of 19% from management projections is down from 27%.
OKTA shares got hit for 34% on September 1 after this report.
(end of October article excerpt)
What was so interesting after this quarter is how much the analysts retreated.
While 2022 EPS estimates naturally had to move higher on the big positive earnings surprise, there were upward revisions into 2023 too despite the company re-evaluating out-year targets.
In October, I noted that "Next year's consensus leaped higher from a loss of 60-cents to a loss of only 31-cents. But analysts also downgraded the stock across the board on other factors."
And what we saw was a herd of analysts lowering their estimates and growth expectations.
But now, after the most recent quarterly report, the spreadsheet jockeys are changing their tune...
Okta price target raised to $90 from $80 at Piper Sandler
Analyst Rob Owens continues to see multiple opportunities across his software universe, saying valuations appear "relatively de-risked and underlying trends prove resilient." However, he believes there is still more bad news to come, especially on the economic front. As such, 2023 "potentially sets up as a stock picker's year," Owens tells investors in a research note. His top five ideas include Okta (OKTA - Free Report) , Palo Alto (PANW), Crowdstrike (CRWD), ServiceNow (NOW) and CyberArk (CYBR).
Okta price target raised to $80 from $72 at KeyBanc
Analyst Michael Turits raised the firm's price target on Okta to $80 from $72 to reflect conversations with the channel and CIO respondents, and to reflect his updated outlook following survey response data. The analyst keeps an Overweight rating on the shares.
As you can see, the prospects for this key provider of "identity security" have rebounded considerably.
I will reiterate the same thing I wrote 3 months ago when I saw the value...
Bottom line on OKTA: With its unique market position, and buoyant topline growth of 28%, Okta should be a good long-term investment as it falls back to levels not seen since December of 2018.
What's changed is that EPS estimates for this year have done a complete 180 -- from projected losses of 32-cents to PROFITS of 31-cents!
This represents a 200%+ flip in profitability!
And this is derived from the topline climbing an unexpected leap above $2 billion, representing 16% growth.
New bottom line for OKTA: Shares look poised to breakout above $70-75 very soon. I would be on-board!