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Okta (NASDAQ:OKTA) shares jumped more than 10% in pre-market trading on Wednesday after it reported second-quarter results and raised its full-year guidance, leading to admiration from several on Wall Street.
Mizuho Securities analyst Gregg Moskowitz reiterated his buy rating on Okta (OKTA) shares and bumped his price target to $93 from $90, highlighting the company’s execution, as evidenced by 23% year-over-year revenue growth. Additionally, billings and current remaining performance obligations came in “well above” expectations, with some macro stabilization being seen.
“While OKTA has had its fair share of challenges over the past couple of years, Mizuho wouldn’t lose sight of the fact that the company remains a leader in the critically important identity management market,” Moskowitz wrote in an investor note, adding that the medium-term risk reward is “very favorable at current levels.”
Evercore ISI Group analyst Peter Levine upgraded Okta (OKTA) to in-line from underperform, stating that he is “a lot more optimistic” that most of the concerns have either played out or are being actively addressed, with signs of improvement.
“Evercore believes the risk/reward is more balanced at these levels given the business seems to be stabilizing,” Levine wrote in his upgrade.
Bank of America analyst Madeline Brooks was a bit more hesitant to heap praise on Okta (OKTA), noting that the guidance for current remaining performance obligations keeps her “cautious.”
“While [second-quarter current remaining performance obligations] growth of 18% (+300bps above Street) was a positive surprise, 3Q guidance of 13% growth implies trends will deteriorate in [the second-half],” Brooks wrote in an investor note. “While guidance may seem conservative, saturation among the existing customer base in addition to one-off tailwinds that occurred in 2Q could put additional pressure on growth.”
Brooks has an underperform rating and $64 price target on Okta (OKTA).
Okta (OKTA) now expects fiscal 2024 revenue to be between $2.207B and $2.215B, up from a prior outlook of $2.175B to $2.185B. The consensus revenue estimate is $2.18B. The company also raised its full-year adjusted earnings outlook to be between $1.17 and $1.20 per share, up from a prior forecast of 88 cents to 93 cents per share.
Analysts are universally bullish on Okta (OKTA). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha’s quant system, which consistently beats the market, rates OKTA a BUY.
