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Okta Inc Class A OKTA

Morningstar Rating
$104.92 +0.49 (0.47%)
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Company Report

Okta Earnings: Robust Comeback Quarter, With Strong Growth and Profitability

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.

Price vs Fair Value

OKTA is trading within a range we consider fairly valued.
Price
$105.65
Fair Value
$134.00
Uncertainty
Very High
1-Star Price
$823.00
5-Star Price
$91.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Okta has strong secular tailwinds behind its back as the IAM market is expected to grow rapidly.

Bears

There are behemoths such as Microsoft, Oracle, and IBM that have products in the IAM space that provide competition to Okta.

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News

Trading Information

Previous Close Price
$104.43
Day Range
$103.14105.69
52-Week Range
$65.04114.50
Bid/Ask
$100.50 / $105.51
Market Cap
$17.56 Bil
Volume/Avg
1.4 Mil / 2.3 Mil

Key Statistics

Price/Earnings (Normalized)
65.82
Price/Sales
7.59
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Okta is a cloud-native security company that focuses on identity and access management. The San Francisco-based firm went public in 2017 and focuses on two key client stakeholder groups: workforces and customers. Okta’s workforce offerings enable a company’s employees to securely access its cloud-based and on-premises resources. The firm’s customer offerings allow its clients’ customers to securely access the client’s applications.
Sector
Technology
Industry
Software - Infrastructure
Stock Style Box
Mid Growth
Total Number of Employees
5,908

Competitors

Valuation

Metric
OKTA
MSFT
IBM
Price/Earnings (Normalized)
65.8238.1019.85
Price/Book Value
2.9813.147.75
Price/Sales
7.5913.822.84
Price/Cash Flow
37.4930.1214.98
Price/Earnings
OKTA
MSFT
IBM

Financial Strength

Metric
OKTA
MSFT
IBM
Quick Ratio
1.551.020.80
Current Ratio
1.671.220.96
Interest Coverage
−51.2541.495.99
Quick Ratio
OKTA
MSFT
IBM

Profitability

Metric
OKTA
MSFT
IBM
Return on Assets (Normalized)
3.20%19.91%6.74%
Return on Equity (Normalized)
5.06%39.57%39.82%
Return on Invested Capital (Normalized)
3.10%29.21%11.92%
Return on Assets
OKTA
MSFT
IBM
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Software - Infrastructure Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
MSFT
Microsoft CorpPptnwpgdwVvtm$3.1 Tril
ORCL
Oracle CorpYjlGpyfdb$344.3 Bil
ADBE
Adobe IncSnwzgvwyyKghg$226.0 Bil
PANW
Palo Alto Networks IncLbhvwthvdcLjkqv$91.2 Bil
SNPS
Synopsys IncYzwjyxhpkbLhkmsn$87.5 Bil
CRWD
CrowdStrike Holdings Inc Class AFywrnhjcVfmrbr$77.9 Bil
PLTR
Palantir Technologies Inc Ordinary Shares - Class AJptkdrqrbJqsmt$54.2 Bil
FTNT
Fortinet IncGvgtntnfVxxfr$51.3 Bil
SQ
Block Inc Class ANpdxvlfbYglpwv$51.2 Bil
NET
Cloudflare IncXnfzfdmqCksnw$32.6 Bil

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