Okta Posts Q3 Beat, Guidance Miss: Analyst Says 'Sustainable Growth Remains Hazy'

Core Viewpoint - Okta Inc reported strong third-quarter results, leading to a rise in its share price, despite providing conservative guidance for fiscal 2026 which may have surprised some investors [1][2]. Financial Performance - Okta achieved a revenue growth of 14% year-on-year, surpassing the consensus estimate of 11% [3]. - Subscription revenue reached $651 million, reflecting a 14% year-on-year growth, which exceeded the estimate of $635 million [9]. - The company's cRPO (current Remaining Performance Obligations) was reported at $2.062 billion, exceeding the guidance midpoint by $75 million [10]. - New products accounted for 15% of bookings, indicating an expansion in the product portfolio [11]. Analyst Ratings and Price Targets - BMO Capital Markets maintained a Market Perform rating and raised the price target from $103 to $105 [3]. - Needham maintained a Buy rating and increased the price target from $100 to $115, citing improved execution and early signs of product adoption [5]. - Stifel reiterated a Buy rating and raised the price target from $108 to $115, noting strong results and above-expectation guidance [7]. - Goldman Sachs maintained a Buy rating and increased the price target from $97 to $107, highlighting that quarterly revenues and EBIT exceeded consensus [11]. - Guggenheim Securities maintained a Buy rating with a price target of $130, although noted that the preliminary fiscal 2026 revenue growth guidance of 7% was below consensus [13]. Guidance and Future Outlook - The company provided a conservative revenue growth guidance of 7% for fiscal 2026, which is below the consensus estimate of 9% [4][13]. - Analysts expressed that the preliminary guidance may be conservative based on management's typical approach [6]. - Management indicated plans to build out go-to-market specializations to reinvigorate growth, which analysts support [8]. - The fourth-quarter guidance for cRPO was set at 9% year-on-year, which some analysts view as conservative [16]. Market Reaction - Okta's shares rose by 4.39% to $85.22 following the earnings report [21].