Core Viewpoint - Okta is expected to report strong fiscal first-quarter 2026 results, with anticipated non-GAAP earnings of 76-77 cents per share and revenues between $678-$680 million, reflecting a 10% year-over-year growth [1][2]. Group 1: Earnings and Revenue Expectations - The Zacks Consensus Estimate for earnings has remained steady at 77 cents per share, indicating an 18.46% year-over-year growth [2]. - The consensus for revenues is pegged at $679.73 million, representing a 10.17% increase from the previous year [2]. Group 2: Customer Growth and Product Portfolio - Okta's expanding product portfolio, particularly in security and identity governance, is expected to drive client acquisition and top-line growth, with 19,650 customers and $4.215 billion in remaining performance obligations reported at the end of fiscal Q4 2025 [3]. - The number of customers with over $100 thousand in Annual Contract Value increased by 7% year-over-year to 4,800 [3]. Group 3: New Product Momentum - Continued momentum from new products such as Okta Identity Governance and Privileged Access is expected to contribute positively to the upcoming quarter, with over 20% of fiscal Q4 bookings coming from these offerings [4]. - Okta Identity Governance has rapidly gained traction, with over 1,300 customers contributing more than $100 million in annual contract value within two years of its launch [5]. Group 4: Partner Ecosystem - Okta benefits from a robust partner ecosystem, including major players like Amazon Web Services, Google, and Salesforce, which enhances its security capabilities [6][7]. - More than 70% of deals in fiscal Q4 2025 were influenced by partners, with Okta surpassing $1 billion in total contract value through its partnership with AWS [7]. Group 5: Stock Performance - Okta shares have outperformed the Zacks Computer & Technology sector, surging 54.9% year-to-date, while the sector has declined by 2% [8]. Group 6: Competitive Landscape - Despite strong product momentum, Okta faces stiff competition from CyberArk and Microsoft, both of which are expanding their presence in the identity and access management space [14]. - Microsoft's Entra identity offering serves over 900 million monthly active users, highlighting the competitive pressure in the market [15].

Company Overview - Okta's stock has seen a positive shift from investors over the past 6 months despite tepid revenue growth, with impressive margin gains reported [1] - The company's Remaining Performance Obligations (RPO) growth indicates potential revenue increases in the future [1] Investment Strategy - Narweena, an asset manager led by Richard Durant, focuses on identifying market dislocations due to misunderstandings of long-term business prospects [1] - The firm aims for excess risk-adjusted returns by targeting businesses with secular growth opportunities in markets with high barriers to entry [1] - Narweena's investment approach emphasizes company and industry fundamentals to uncover unique insights, with a preference for smaller cap stocks and less obvious competitive advantages [1] Market Trends - An aging population with low growth and stagnating productivity is expected to create new investment opportunities distinct from historical trends [1] - Certain industries may experience stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition [1] - Other sectors may face rising costs and diseconomies of scale, impacting overall market dynamics [1] - The economy is increasingly influenced by asset-light businesses, leading to a declining need for infrastructure investments over time [1] - A growing pool of capital is competing for a limited number of investment opportunities, resulting in rising asset prices and compressed risk premiums [1]

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Okta. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

Core Insights - Okta (OKTA) is expected to report quarterly earnings of $0.77 per share, an 18.5% increase year-over-year, with revenues forecasted at $679.73 million, reflecting a 10.2% year-over-year growth [1] Earnings Estimates - The consensus EPS estimate has been revised 0.3% lower over the last 30 days, indicating a reevaluation of initial estimates by analysts [2] - Revisions to earnings projections are crucial for predicting investor behavior and are linked to short-term stock price performance [3] Revenue Projections - Analysts estimate 'Revenue- Subscription' at $660.72 million, a 9.6% year-over-year increase, while 'Revenue- Professional services and other' is projected at $12.86 million, indicating an 8.1% year-over-year decline [5] Performance Obligations - Current remaining performance obligations (cRPO) are expected to reach $2.19 billion, up from $1.95 billion in the same quarter last year [6] - Remaining performance obligations are projected at $4.02 billion, compared to $3.36 billion reported in the same quarter of the previous year [6] Key Metrics - The consensus estimate for 'Gross margin- Subscription' is 83.0%, up from 78% in the same quarter last year [7] - Analysts predict a total customer count of 20,001, an increase from 19,100 in the same quarter last year [7] Stock Performance - Over the past month, Okta shares have returned +33.1%, outperforming the Zacks S&P 500 composite's +12.7% change [7] - Currently, Okta carries a Zacks Rank 4 (Sell), suggesting potential underperformance in the near future [7]

Core Insights - The global security market is projected to reach $212 billion in 2023, growing 15.1% year over year, benefiting both Okta and Fortinet [2] Company Analysis: Okta (OKTA) - Okta is experiencing strong demand for its identity security solutions, with a diverse portfolio expected to drive share price growth by 2025 [3] - Over 20% of Okta's fourth-quarter fiscal 2025 bookings came from new products, indicating robust client acquisition and top-line growth [4] - Okta's customer base reached 19,650, with remaining performance obligations totaling $4.215 billion, showcasing strong subscription revenue prospects [4] - The number of customers with over $100 thousand in Annual Contract Value increased by 7% year over year to 4,800 [4] - Okta's AI capabilities are integrated across its products, enhancing user experience and cybersecurity [5] - The company has a strong partner ecosystem, with over 7,000 integrations with various cloud and IT infrastructure providers [6] Company Analysis: Fortinet (FTNT) - Fortinet maintains strong momentum in network security, being the most deployed firewall vendor globally [7] - The expansion of Fortinet's unified Secure Access Service Edge (SASE) platform is a key performance driver, offering comprehensive security solutions [8] - Fortinet's sovereign SASE solution is gaining traction in regulated sectors, ensuring compliance while maintaining performance [9] - The company is investing in AI capabilities, holding over 500 AI patents, with new features driving client engagement [10] Performance and Valuation - Year-to-date, Fortinet shares have appreciated by 10.9%, while Okta shares have surged by 60.5% [11] - Both companies are currently considered overvalued, with Fortinet trading at a forward Price/Sales ratio of 11.38X and Okta at 7.49X [14] - Fortinet's 2025 earnings estimate is $2.15 per share, reflecting a 2.74% year-over-year increase, while Okta's fiscal 2026 estimate is $1.09 per share, indicating a significant 172.14% jump year over year [17][18] - Both companies have consistently beaten earnings estimates, with Okta showing a higher average surprise of 204.9% compared to Fortinet's 30.98% [19] Conclusion - Fortinet is benefiting from increased demand from large enterprises and growth in security subscriptions, while Okta faces challenges from macroeconomic conditions [20]

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Okta (OKTA) .Okta currently has an average brokerage recommendation (ABR) of 1.92, on a scale o ...

Okta (NASDAQ: OKTA ) has established itself as the leading independent identity‑management platform, and its long‑term leadership is setting the stage for outsized gains as enterprises embrace AI‑driven agents. In the emerging era of generative AI, companies will deploy not just human users but"AWS Certified AI Practitioner Early Adopter"I am a DevOps Engineer for a major, wholly owned subsidiary of a large-cap Fortune 500. I am a true subject-matter expert on the actual buildout, deployment, and maintenanc ...

Company Overview - Okta (OKTA) shares increased by 7.4% to close at $112.54, supported by strong trading volume, contrasting with a 0.4% loss over the past four weeks [1] - The company is experiencing robust demand for its identity security solutions, driven by product innovation and increased customer adoption of offerings like Okta Identity Governance [1] Earnings Expectations - Okta is projected to report quarterly earnings of $0.77 per share, reflecting an 18.5% year-over-year increase, with revenues expected to reach $679.73 million, up 10.2% from the previous year [2] - The consensus EPS estimate for Okta has remained stable over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [3] Industry Context - Okta is part of the Zacks Security industry, which includes other companies like Fortinet (FTNT), whose stock closed 1.5% higher at $104.21, with a 6.6% return over the past month [3] - Fortinet's consensus EPS estimate has seen a slight decrease of 0.2% to $0.53, representing a 23.3% increase from the previous year [4]

Company Performance - Okta has shown a year-to-date performance increase of approximately 42.8%, significantly outperforming the average return of -10.8% for Computer and Technology companies [4] - The Zacks Consensus Estimate for Okta's full-year earnings has increased by 74.6% over the past three months, indicating improved analyst sentiment and a stronger earnings outlook [3] Industry Comparison - Okta belongs to the Security industry, which consists of 5 individual stocks and currently ranks 89 in the Zacks Industry Rank. The average gain for stocks in this group is 12.7% this year, highlighting Okta's superior performance [5] - In contrast, CyberAgent, another outperforming stock in the Computer and Technology sector, belongs to the Internet - Services industry, which has a lower ranking of 168 and has returned -13.4% this year [6]

Core Viewpoint - Okta is set to be added to the S&P MidCap 400 index, which is expected to increase demand for its shares and positively impact its stock price in the short term [2][4]. Group 1: Index Inclusion - Okta will replace Berry Global Group in the S&P MidCap 400 index starting May 1 [2]. - The addition to the index is generally seen as a positive development, as it increases demand from index funds and institutional investors [4]. Group 2: Financial Performance - For fiscal 2025 fourth-quarter results, Okta reported revenue of $682 million, a 13% year-over-year increase, and adjusted EPS of $0.78, which is a 24% jump [5]. - Management provided guidance for 2026, projecting revenue of approximately $2.855 billion and adjusted EPS of $3.17, both exceeding Wall Street expectations [6]. Group 3: Company Recovery - Following a significant security breach, Okta appears to be on a recovery path, which has restored shareholder confidence [6].