Company Reports

We believe Okta is poised for success as a leader in the identity and access management, or IAM, space. Okta’s platform weaves together the firm’s workforce and customer offerings, which stands to grow in importance as enterprises increasingly adopt zero-trust security architectures, migrate to the cloud, and grapple with a rapidly expanding identity perimeter that now encompasses AI agents and non-human identities. However, we assign Okta with a no-moat rating as we don’t foresee excess returns on capital in the next few years. Still, we believe the firm’s platform, impressive number of integrations, and a broad range of SKUs have allowed the business to be on the cusp of generating high customer switching costs and a network effect.

Okta reported second-quarter earnings, with sales up 11% to $805 million and operating margins expanding 770 basis points to 13%. The firm's forward-looking sales metric, remaining performance obligations, grew 17% to $4.9 billion.

We believe Okta is poised for success as a leader in the identity and access management, or IAM, space. Okta’s platform weaves together the firm’s workforce and customer offerings, which stands to grow in importance as enterprises increasingly adopt zero-trust security architectures, migrate to the cloud, and grapple with a rapidly expanding identity perimeter that now encompasses AI agents and non-human identities. However, we assign Okta with a no-moat rating as we don’t foresee excess returns on capital in the next few years. Still, we believe the firm’s platform, impressive number of integrations, and a broad range of SKUs have allowed the business to be on the cusp of generating high customer switching costs and a network effect.

Okta reported a solid start to fiscal 2027, with the firm's sales growing 11% to $765 million and adjusted EPS growing 6% to $0.91. Management marginally upped its sales and profitability outlook for fiscal 2027 to 9.5% and 25.5%, up from 9% and 25.3% guided to previously, respectively.

Anthropic confirmed the existence of an upcoming model after Fortune first reported plans for it on March 26. This new model, named either Mythos or Capybara, is reportedly much better than existing models at finding cyber vulnerabilities. This news sent our cyber coverage down 5% on average.

Okta reported solid fourth-quarter results, with the firm's sales growing 11% to $761 million and adjusted operating margin expanding 190 basis points to 27%. Management's outlook for fiscal 2027 includes full-year sales growth and margin of 9% and 25%, respectively.

We believe Okta is poised for success as a leader in the identity and access management, or IAM, space. Okta’s platform weaves together the firm’s workforce and customer offerings, which stands to grow in importance as enterprises increasingly adopt zero-trust security architectures, migrate to the cloud, and grapple with a rapidly expanding identity perimeter that now encompasses AI agents and non-human identities. However, we assign Okta with a no-moat rating as we don’t foresee excess returns on capital in the next few years. Still, we believe the firm’s platform, impressive number of integrations, and a broad range of SKUs have allowed the business to be on the cusp of generating high customer switching costs and a network effect.

Okta reported strong third-quarter financial results, with the firm's sales growing 12% to $742 million and adjusted operating margins expanding 300 basis points to 24%. Management also provided solid top-line guidance for the upcoming quarter, with sales expected to grow 10% to $749 million.

Okta reported solid second-quarter results, with sales growing 13% to $728 million and adjusted operating margins growing almost 500 basis points to 28%. Remaining performance obligations, a forward-looking metric, also showed strength, growing 18% year over year.

The Wall Street Journal reported that Palo Alto was in talks to acquire CyberArk, an identity security vendor, in a deal set to be worth more than $20 billion. CyberArk's stock traded up sharply on the news while Palo Alto's shares went down, highlighting potential investor concerns.

Okta reported solid first-quarter results that included sales up 12% to $688 million and adjusted operating margins up 520 basis points to 27%. Looking ahead, the firm also raised its fiscal 2026 profitability outlook while maintaining its sales outlook provided last quarter.

We believe Okta is poised for success as a leader in the identity and access management, or IAM, space. Okta’s Identity Cloud, which weaves together the firm’s workforce and customer offerings, stands to grow in importance to its clients as zero-trust security infrastructures, digital transformations, and cloud migrations increase the company’s value proposition. However, we assign Okta with a no-moat rating as we don’t foresee excess returns on capital in the next few years. Yet, we believe the firm’s platform, impressive number of integrations, and a broad range of SKUs have allowed the business to be on the cusp of generating high customer switching costs and a network effect.

Okta reported strong fourth-quarter financial results which included sales growing 13% to $682 million and adjusted operating margins expanding 340 basis points to 25%. The firm also raised its fiscal 2026 sales outlook.

Okta reported solid third-quarter financial results—sales grew 14% year over year to $665 million and adjusted margins expanded 600 basis points year over year to 21%. The firm also raised its sales and adjusted margins outlook for fiscal 2025.

We are maintaining our $100 fair value estimate for no-moat Okta after the firm reported solid second-quarter results and raised its full-year guidance. Broad-based strength in both revenue and profitability exceeded our estimates, but behind this rosy picture, we saw weaknesses in customer additions and sentiment. Considering the broader picture, the macroeconomic environment continues to pressure the business, with continued scrutiny surrounding last year’s security breach still keeping investors cautious. With shares dipping after hours, we view Okta as modestly undervalued.

We are maintaining our $100 fair value estimate for no-moat Okta after the firm kicked off fiscal 2025 with a set of robust financial results and guidance. While security breaches and a poorly executed acquisition of Auth0 have damped Okta's glow to many investors, we were encouraged by the firm's ability to steady its ship by emphasizing strong execution and rebuilding investor trust in the firm. With shares trading up slightly after hours, we view Okta as fairly valued. For investors seeking cybersecurity exposure, we'd recommend wide-moat Palo Alto and Fortinet as better companies to invest in than no-moat Okta.

We are raising our fair value estimate for no-moat Okta to $100 from $80 after the firm reported strong fourth-quarter results and provided guidance for fiscal 2025 ahead of our prior estimates. We were particularly impressed by the firm’s ability to post strong financial results and guidance despite its security breach in October and the ongoing macroeconomic uncertainty affecting customer buying behavior. We think investors, much like us, saw a lot to like in Okta’s financial results, with shares trading up sharply following the firm’s earnings report. Relative to our updated fair value estimate, we view Okta as fairly valued. For investors seeking cybersecurity exposure, we’d recommend wide-moat Fortinet and Palo Alto Networks as better companies to invest in instead of no-moat Okta.

We believe Okta is poised for long-term success as a leader in the identity and access management, or IAM, space. Okta’s Identity Cloud, which weaves together the firm’s workforce and customer offerings, stands to grow in importance to its clients as zero-trust security infrastructures, digital transformations, and cloud migrations increase the company’s value proposition. However, we assign Okta with a no-moat rating as we don’t foresee excess returns on capital in the next few years. Yet, we believe the firm’s platform, impressive number of integrations, and a broad range of SKUs have allowed the business to be on the cusp of generating high customer switching costs and a network effect.

We are reducing our fair value estimate for no-moat Okta to $80 from $85 after the firm’s strong third-quarter performance was more than offset by its weak preliminary guidance for fiscal 2025. While this quarter’s financial results highlighted solid sales and profitability expansion, we remain concerned about the potential financial blowback to the firm following a security breach Okta disclosed in October.

We believe Okta is poised for long-term financial success as a leader in the identity and access management, or IAM, space. Okta’s Identity Cloud, which weaves together the firm’s workforce and customer offerings, stands to grow in importance to its clients as zero-trust security infrastructures, digital transformations, and cloud migrations increase the company’s value proposition. However, we assign Okta with a no-moat rating as we don’t foresee excess returns on capital in the next few years. Yet, we believe the firm’s platform, impressive number of integrations, and a broad range of SKUs have allowed the business to be on the cusp of generating high customer switching costs and a network effect.