Okta Anticipates Strong Q1 Fiscal 2026 Results Amid Growth
Okta (OKTA) is set to announce its first-quarter fiscal 2026 earnings on May 27.
Expected Financial Performance
For this quarter, Okta forecasts non-GAAP earnings between 76 and 77 cents per share. Projected revenues are expected to range from $678 million to $680 million, reflecting a 10% increase compared to the prior year’s figures.
According to the Zacks Consensus Estimate, earnings have remained stable at 77 cents per share over the last 30 days, suggesting an 18.46% year-over-year growth. Revenue expectations stand at $679.73 million, a 10.17% increase from the same quarter last year.
Okta has consistently outperformed the Zacks Consensus Estimate in its past four quarters, with an average earnings surprise of 15.70%. (For the latest EPS estimates and surprises, consult the Zacks earnings Calendar.)
Okta, Inc. Price and EPS Surprise
Okta, Inc. price-eps-surprise | Okta, Inc. Quote
Factors Driving Growth
Okta’s expanding product range, particularly in security and identity governance, is likely to contribute to its client acquisition and revenue growth this quarter. The company ended fiscal Q4 2025 with approximately 19,650 customers and $4.215 billion in remaining performance obligations, indicating strong prospects for subscription revenue. Notably, the number of customers generating over $100,000 in Annual Contract Value grew by 7% year over year to 4,800.
New offerings such as Okta Identity Governance, Privileged Access, Identity Threat Protection with Okta AI, Workforce Identity Suites, and Auth for GenAI have sustained growth momentum. More than 20% of Q4 bookings came from these innovations, a trend likely continued into the current quarter.
In particular, Okta Identity Governance has quickly attracted over 1,300 customers, generating more than $100 million in annual contract value within just two years of its launch. This rapid adoption is expected to enhance bookings further in the coming quarter.
Additionally, Okta’s partnerships bolster its market presence. Collaborations with entities like Amazon Web Services (AMZN), CrowdStrike, Google, and others have enriched its security capabilities. Over 70% of deals in Q4 2025 were influenced by partners, leading to significant aggregate contract value through Amazon Web Services—surpassing $1 billion.
OKTA Stock Performance
Okta shares have increased by 54.9% year-to-date, contrasting with a 2% decline in the broader Zacks Computer & Technology sector. The Zacks Security industry has risen by 17.1% in the same period, driven by strong demand for its identity security solutions.
Image Source: Zacks Investment Research
Valuation Concerns
Despite recent successes, OKTA’s stock shows a Value Score of F, indicating an overvaluation. The forward 12-month Price/Sales ratio is currently 7.22, higher than the broader sector’s 6.14.
Price/Sales (F12M)
Image Source: Zacks Investment Research
Competitive Landscape
While Okta’s extensive portfolio aids in client expansion, it faces significant competition from players like CyberArk (CYBR) and Microsoft (MSFT). Both companies are also gaining ground in the identity and access management sector, with Microsoft reporting more than 900 million monthly active users for its Entra identity suite and a 21% year-over-year increase in security customers.
CyberArk has also made advancements, recently announcing the CyberArk Secure AI Agents Solution, aiming to enhance identity-first security for AI applications.
Conclusion and Outlook
Okta is navigating a challenging macroeconomic environment characterized by rising tariffs, which may impact future performance. Add to this the competitive landscape and current valuation pressures, and these factors could influence Okta’s results in the upcoming quarter, despite robust product momentum.
Currently, OKTA holds a Zacks Rank #4 (Sell), suggesting that investors may want to reconsider their positions in the stock at this time.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
