Core Insights - Zacks Premium offers various tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores serve as complementary indicators to the Zacks Rank, aiding in stock selection for potential market outperformance [2] Zacks Style Scores Overview - Stocks are rated A, B, C, D, or F based on value, growth, and momentum characteristics, with higher scores indicating better chances of outperforming the market [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - Focuses on identifying undervalued stocks using ratios like P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - Evaluates a company's financial strength and future outlook through projected and historical earnings, sales, and cash flow [4] Momentum Score - Targets stocks with upward or downward trends in price or earnings outlook, utilizing factors like one-week price change and monthly earnings estimate changes [5] VGM Score - Combines all three Style Scores to provide a comprehensive indicator for stock selection based on value, growth, and momentum [6] Zacks Rank Integration - The Zacks Rank is a proprietary model based on earnings estimate revisions, with 1 (Strong Buy) stocks achieving an average annual return of +23.9% since 1988, significantly outperforming the S&P 500 [7] - There are over 800 top-rated stocks available, making it essential to use Style Scores for effective stock selection [8] Investment Strategy - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] - Stocks with a 3 (Hold) rank should also have A or B Scores to maximize upside potential [9] Earnings Estimate Revisions - The direction of earnings estimate revisions is crucial; stocks with lower ranks but high Style Scores may still face downward price pressure [10] Company Spotlight: Okta (OKTA) - Okta provides cloud-based identity solutions and is currently rated 3 (Hold) with a VGM Score of B [11] - The company has a Momentum Style Score of A, with shares increasing by 6.8% over the past four weeks and upward earnings estimate revisions for fiscal 2026 [12] - The Zacks Consensus Estimate for Okta has risen by $0.07 to $3.44 per share, with an average earnings surprise of +9.1% [12]

Why it's not always smart to jump ship for a flashy job offer ...

SAN FRANCISCO--(BUSINESS WIRE)--Okta, Inc. (Nasdaq: OKTA), the leading independent identity partner, today announced the appointment of Rob Bernshteyn and Paul Sagan to the Company's board of directors, effective December 19, 2025. "Rob and Paul bring a wealth of operational experience across SaaS, cybersecurity, and AI that will help drive Okta's next phase of growth,†said Todd McKinnon, Okta CEO and Co-Founder. "Their expertise comes at a pivotal moment, as identity becomes the foundation for secure AI. W ...

Core Viewpoint - Software and cybersecurity stocks are gaining attention as businesses invest in cloud, AI, and identity solutions, but not all vendors will benefit equally [1] Group 1: Company Overview - Okta (OKTA) has recently been upgraded to "Buy" by Jefferies, which raised its price target, citing potential for Okta to evolve into a comprehensive identity platform [2] - Founded in 2009, Okta specializes in identity and access management software, providing tools for secure access management, including single sign-on and multifactor authentication [3] - Okta was recognized as a Leader in Gartner's 2025 Access Management Magic Quadrant, reinforcing its strong market position [4] Group 2: Market Performance - Okta's market value is approximately $15.6 billion, with the stock up about 15% year-to-date in 2025 after hitting a 52-week low of $75.05 in early December [5] - The stock's recovery is attributed to improved execution, recent earnings beats, and a stronger outlook, alongside growing recognition of Okta's leadership in AI and cloud identity [5] Group 3: Valuation Metrics - Okta's trailing earnings yield a price-to-earnings ratio near 80, which is about three times the sector median, indicating high investor expectations [6] - The price-to-sales ratio is approaching 6x, significantly higher than typical software peers, and the enterprise-value-to-revenue multiple is around 5, making it more expensive than many SaaS competitors [6] - These elevated multiples suggest that investors are anticipating continued strong growth with limited room for errors [6]

Core Viewpoint - The article summarizes significant analyst rating changes that are expected to impact the market, highlighting both upgrades and downgrades across various companies and sectors [1][6]. Upgraded Ratings - Roku (ROKU): Morgan Stanley upgraded the rating from "Underweight" to "Overweight," raising the target price from $85 to $135, citing strong performance in the digital advertising market and expected robust growth in U.S. advertising spending by 2026 [5]. - Okta (OKTA): Jefferies upgraded the rating from "Hold" to "Buy," increasing the target price from $90 to $125, noting Okta's efforts to build a comprehensive identity authentication platform that can capitalize on the growing demand for intelligent agents [5]. - ServiceNow (NOW): Guggenheim upgraded the rating from "Sell" to "Neutral," stating that the current stock price is below the previously set target price, making it attractive [5]. - Rockwell Automation (ROK): Goldman Sachs upgraded the rating from "Sell" to "Neutral," raising the target price from $329 to $448, highlighting the potential operational leverage from structural price increases under new management [5]. - L3 Harris Technologies (LHX): Morgan Stanley upgraded the rating from "Hold" to "Overweight," increasing the target price from $350 to $367, based on a positive outlook for the aerospace and defense sector in 2026, with demand growth expected to outpace supply [5]. Downgraded Ratings - Zimmer Biomet (ZBH): Baird downgraded the rating from "Outperform" to "Neutral," lowering the target price from $117 to $100, citing disappointing performance expectations for 2025 and potential market share loss to Stryker's Mako orthopedic surgical robot [5]. - Capri Holdings (CPRI): Wells Fargo downgraded the rating from "Overweight" to "Hold," raising the target price from $25 to $27, indicating that previous positive factors driving the stock price have diminished, leading to increased market divergence on growth expectations [5]. - Lockheed Martin (LMT): Morgan Stanley downgraded the rating from "Overweight" to "Hold," reducing the target price from $630 to $543, while still optimistic about the aerospace and defense sector's outlook [5]. - StubHub (STUB): Citizens Bank downgraded the rating from "Outperform" to "Market Perform," with no target price set, anticipating increased market competition in 2026 that may limit market share growth [5]. - GitLab (GTLB): KeyBanc downgraded the rating from "Overweight" to "Sector Weight," with no target price set, expressing concerns over pricing power potentially hindering growth and increased execution risks due to a shift to a usage-based billing model [5]. Initiated Coverage - MongoDB (MDB): Raymond James initiated coverage with a "Market Perform" rating and no target price, noting the balanced market sentiment around the stock despite its strategic importance in the independent database platform sector [11]. - D-Wave Quantum (QBTS): Jefferies initiated coverage with a "Buy" rating and a target price of $45, highlighting the increasing market attention and application rates for various quantum computing architectures [11]. - Omnicom Group (OMC): Morgan Stanley resumed coverage with a "Hold" rating and a target price of $88, indicating that the company's merger integration efforts present both opportunities and risks [11]. - Freshpet (FRPT): Morgan Stanley initiated coverage with a "Hold" rating and a target price of $71, recognizing the long-term growth potential in the pet food industry but cautioning against short-term economic pressures [11]. - Jumia Technologies (JMIA): Craig-Hallum initiated coverage with a "Buy" rating and a target price of $18, emphasizing the company's optimized product offerings and logistics network as key drivers for achieving sustainable double-digit growth by 2030 [11].

Upgrades - Morgan Stanley upgraded L3Harris Technologies (LHX) to Overweight from Equal Weight with a price target of $367, up from $350, citing attractive aerospace and defense demand outpacing supply growth into 2026 [2] - Morgan Stanley also upgraded General Dynamics (GD) to Overweight [2] - Goldman Sachs upgraded Rockwell Automation (ROK) to Neutral from Sell with a price target of $448, up from $329, highlighting early stages of structural pricing improvements under new management [3] - Jefferies upgraded Okta (OKTA) to Buy from Hold with a price target of $125, up from $90, noting significant opportunities in building a complete identity platform [4] - Morgan Stanley upgraded Roku (ROKU) to Overweight from Underweight with a price target of $135, up from $85, anticipating a strong 2026 for U.S. advertising spend due to digital strength [4] Downgrades - Baird downgraded Zimmer Biomet (ZBH) to Neutral from Outperform with a price target of $100, down from $117, due to disappointing 2025 projections despite good initial product uptake [5] - Wells Fargo downgraded Capri Holdings (CPRI) to Equal Weight from Overweight with a price target of $27, up from $25, arguing that positive catalysts are now behind and risk/reward is more balanced [5] - Morgan Stanley downgraded Lockheed Martin (LMT) to Equal Weight from Overweight with a price target of $543, down from $630, while still viewing aerospace and defense as attractive [5] - Citizens downgraded StubHub (STUB) to Market Perform from Outperform, expecting increased competition in 2026 to limit share gains [5] - KeyBanc downgraded GitLab (GTLB) to Sector Weight from Overweight, indicating pricing power will be a headwind and execution risk is increasing due to business model changes [5]

Core Insights - Morgan Stanley's analysis indicates that perpetual funds, which select companies and assets based on Environmental, Social, and Governance (ESG) criteria, have lower allocations in the cybersecurity sector compared to the MSCI All Country World Index. This gap is even larger when compared to core AI-related companies, suggesting significant investment opportunities in cybersecurity [1] Group 1: Market Trends - The growth momentum of AI and cybersecurity is expected to provide long-term growth catalysts for cybersecurity companies, highlighting their investment value [1] - The total addressable market for cybersecurity is projected to grow from approximately $270 billion to $377 billion by 2028, representing a compound annual growth rate (CAGR) of about 12% over three years [1] - Cloud security is identified as the fastest-growing area within cybersecurity [1] Group 2: Company Ratings - Analysts have assigned "overweight" ratings to several companies in the cybersecurity sector, including Netskope, Okta, Palo Alto Networks, Varonis Systems, and Zscaler [1] - Among cyber insurance companies, preference is given to Beazley, which is headquartered in London [1]

Core Insights - Morgan Stanley's analysis indicates that perpetual funds, which select companies and assets based on Environmental, Social, and Governance (ESG) criteria while seeking financial returns and positive social impact, have a lower allocation in the cybersecurity sector compared to the MSCI All Country World Index [1] - The gap in allocation is even larger when compared to core AI-related companies, highlighting the potential investment opportunities in cybersecurity [1] - The growth momentum of AI and cybersecurity is expected to provide long-term growth catalysts for cybersecurity companies, further emphasizing their investment value [1] Industry Summary - The total addressable market for cybersecurity is projected to grow from approximately $270 billion to $377 billion by 2028, representing a compound annual growth rate (CAGR) of about 12% over three years [1] - Cloud security is identified as the fastest-growing area within cybersecurity [1] Company Ratings - Analysts have given "overweight" ratings to several companies in the cybersecurity sector, including Netskope, Okta, Palo Alto Networks, Varonis Systems, and Zscaler [1] - Among cybersecurity insurance companies, preference is given to Beazley, which is headquartered in London [1]

Core Insights - Okta and SailPoint both exceeded Q3 2026 earnings expectations, but their financial paths are markedly different [1] Financial Performance - Okta reported $742 million in revenue, a 12% year-over-year increase, and achieved $43 million in GAAP net income [1][2] - SailPoint generated $282 million in revenue, reflecting a 20% growth, but incurred a GAAP operating loss of $36 million [1][3] - Okta's operating cash flow surged 37% to $218 million, while SailPoint's operating cash flow was $54 million [2][4] Cash Position and Valuation - Okta holds $2.46 billion in cash, significantly more than SailPoint's $298 million, allowing for aggressive investment and margin pressure management [5] - SailPoint's price-to-sales ratio stands at 12.7x, compared to Okta's 5.6x, indicating a valuation disconnect despite SailPoint's higher growth rate [5][6] Market Expectations and Analyst Ratings - SailPoint trades at 119x forward earnings, while Okta trades at 24x forward earnings, reflecting differing market expectations [6] - Analysts show a slight preference for SailPoint with 86% buy ratings compared to Okta's 64% [6] Future Outlook - Okta's Q4 revenue guidance is set at $748-750 million, suggesting an 11% growth, while SailPoint anticipates $290-294 million in revenue [7] - Okta's focus on large customer wins and AI product adoption may help sustain profitability, whereas SailPoint needs to demonstrate scalability and reduced losses [7][8]

Core Insights - The article discusses the latest insights from technology companies regarding AI developments and their implications for the industry and business landscape. Adobe - Adobe's management is focusing on the development of its Firefly models and expanding partnerships with other Generative AI models, with the new Firefly Image 5 model showing strong performance [2][3] - The consumption of Generative Credits, which measure usage and monetization of Adobe's models, increased 3x sequentially in Q3 2025, indicating high-value usage [3][12] - Firefly is attracting new creators, with a 2x sequential growth in first-time subscriptions in Q3 2025, and over 100 new deals for Firefly Services were signed by enterprises [5][12] - Adobe's management sees LLMs as a significant opportunity for customer acquisition, allowing for better integration of their models with APIs [6] - The introduction of Adobe Brand Concierge and Firefly Foundry aims to enhance customer engagement and content production efficiency [18][21] MongoDB - MongoDB's management believes that the AI wave has not yet significantly impacted its results, but there are encouraging signs from AI startups building applications on its platform [24][25] - The company sees a structural advantage in its document database model for AI applications, which require a different architecture than traditional databases [26][27] - MongoDB Atlas is supporting significant growth for companies like Mercor, which has seen a 50% month-over-month growth using MongoDB [28][29] - A global media company switched from Elastic Search to MongoDB Atlas, achieving a 90% reduction in latency and a 35% increase in click-through rates [30] NVIDIA - NVIDIA's management reports unprecedented demand for its Blackwell platform, with visibility to $0.5 trillion in revenue from 2025 to 2026 [36][40] - The company anticipates a $3 trillion to $4 trillion annual AI infrastructure build by 2030, driven by increasing compute spend from foundation model builders [37][41] - NVIDIA's GPUs, including older generations, are fully utilized, providing a significant total cost of ownership advantage [39] - The company has seen strong growth in its data center revenue, driven by the GB300 chip, which contributed to a record $51.2 billion in Q3 2025 [40] - NVIDIA's networking revenue has also seen substantial growth, with a 162% year-over-year increase, as major AI deployments now include its networking solutions [47][48]