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Okta (OKTA) Laps the Stock Market: Here's Why

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The most recent trading session ended with Okta (OKTA - Free Report) standing at $97.93, reflecting a +1.28% shift from the previouse trading day's closing. The stock's performance was ahead of the S&P 500's daily gain of 0.97%. Meanwhile, the Dow gained 0.58%, and the Nasdaq, a tech-heavy index, added 1.39%.

The cloud identity management company's shares have seen an increase of 2.83% over the last month, surpassing the Computer and Technology sector's loss of 5.36% and the S&P 500's loss of 1.85%.

Investors will be eagerly watching for the performance of Okta in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on August 28, 2024. The company is expected to report EPS of $0.61, up 96.77% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $631.07 million, indicating a 13.5% increase compared to the same quarter of the previous year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.40 per share and revenue of $2.53 billion, indicating changes of +50% and +11.91%, respectively, compared to the previous year.

Investors should also note any recent changes to analyst estimates for Okta. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Okta currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Okta has a Forward P/E ratio of 40.25 right now. This valuation marks a premium compared to its industry's average Forward P/E of 26.73.

Meanwhile, OKTA's PEG ratio is currently 1.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software and Services was holding an average PEG ratio of 1.63 at yesterday's closing price.

The Internet - Software and Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 98, finds itself in the top 39% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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