Okta’s Stock Shows Resilience Amidst Economic Challenges

Okta (OKTA) shares have dropped 11% in the past month, primarily due to a challenging macroeconomic environment influenced by rising tariffs. Despite this, the company is poised for potential growth in 2025, thanks to an innovative portfolio that includes offerings such as Okta Identity Governance, Privileged Access, Device Access, Fine-Grain Authorization, Identity Security Posture Management, Identity Threat Protection, and Okta AI.

Year-to-date, Okta’s shares have gained 29.3%, outperforming key competitors like Microsoft (MSFT), International Business Machines (IBM), and CyberArk (CYBR). During the same period, IBM and CyberArk returned only 3.6% and 4.6%, while Microsoft experienced a decline of 8.2%.

Current Performance of OKTA Stocks

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Okta continues to benefit from strong demand for its innovative solutions, achieving over 20% of fourth-quarter fiscal 2025 bookings from new products. The company ended that quarter with 19,650 customers and $4.215 billion in remaining performance obligations, indicating promising subscription revenue growth. Notably, the number of customers with more than $100,000 in Annual Contract Value rose 7% year-over-year, totaling 4,800.

Robust Demand for Okta’s Identity Solutions

The company’s offerings include Okta AI, which features AI-driven capabilities that enhance multiple products, enabling organizations to create better user experiences and defend against cyber threats. The Okta Platform and Auth0 Platform support public clouds, on-premises infrastructures, and hybrid cloud environments.

Okta Workforce Identity is utilized to manage and secure identities for employees, contractors, and partners. Additionally, the Customer Identity solution allows clients to manage and secure customer identities. Key solutions within the Okta platform include Identity Governance, Privileged Access, Device Access, Identity Security Posture Management, and Identity Threat Protection powered by Okta AI.

Recently, Okta announced the Developer Preview of Auth for GenAI, part of the Auth0 Platform. This feature set enables developers to seamlessly integrate secure identity capabilities into GenAI applications, ensuring secure workflows and authentication for AI agents. Okta’s latest offerings provide a comprehensive identity security fabric that manages everything from AI agents to API keys and employee identities.

Okta’s competitive edge in the cybersecurity market is evident as it gains market share from Microsoft, IBM, and CyberArk. According to Gartner, Okta outperformed these competitors across all use cases in their Critical Capabilities for Access Management report. The company has also been recognized as a Gartner Peer Insights Customers’ Choice for Access Management for six consecutive times.

A rich ecosystem of partners bolsters Okta’s position. Key partners include Amazon Web Services (AWS), CrowdStrike, Google, LexisNexis Risk Solutions, Microsoft, and numerous others. As of January 31, 2025, Okta boasts over 7,000 integrations with various cloud, mobile, and web applications.

Positive Outlook for Q1 and FY26

For the first quarter of fiscal 2026, Okta anticipates revenues of between $678 million and $680 million, reflecting 10% year-over-year growth. Non-GAAP earnings are expected to range from 76 to 77 cents per share.

Within the same timeframe, the Zacks Consensus Estimate for Okta’s earnings has risen 11.6% over the past 60 days to 77 cents per share, suggesting an 18.46% increase year-over-year.

Okta, Inc. Price and Earnings Consensus

Okta, Inc. price-consensus-chart | Okta, Inc. Quote

For fiscal 2026, Okta projects revenues between $2.85 billion and $2.86 billion, indicating a growth of 9-10% compared to fiscal 2025. The company expects non-GAAP earnings of between $3.15 and $3.20 per share for fiscal 2026.

The Zacks Consensus Estimate for Okta’s earnings has increased by 9.6% to $3.19 per share over the last 60 days, projecting a growth of 13.52% from fiscal 2025 figures. The company has consistently beaten the Zacks Consensus Estimate across the last four quarters, with an average surprise of 15.7%.

Investment Considerations for Okta

Okta currently ranks #2 (Buy) on the Zacks scale and holds a Growth Score of A, indicating a solid investment opportunity. The forward Price/Sales ratio stands at 6.05X, compared to the broader sector’s rate of 5.56X, reflecting a premium valuation.

Price/Sales over the Next 12 Months

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The stock is currently trading above its 200-day moving average, which suggests a bullish trend.

OKTA Stock Above 200-Day Moving Average

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With its current rankings and growth prospects, Okta presents an attractive option for investors seeking opportunities in the identity and cybersecurity market.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.