Okta (NASDAQ:OKTA) Shares Gap Up Following Earnings Beat

Key Points

• Okta shares gapped up after the company delivered a stronger-than-expected earnings report, opening well above the prior close and trading higher in pre-market activity.
• The company reported Q1 adjusted EPS of $0.91 on $765 million in revenue, both ahead of analyst expectations, with revenue rising 11.2% year over year.
• Management also provided Q2 and FY2027 guidance that was above or in line with estimates, while several analysts raised price targets following the results.

Okta, Inc. (NASDAQ:OKTA - Get Free Report) shares gapped up prior to trading on Friday following a stronger than expected earnings report. The stock had previously closed at $94.72, but opened at $107.54. Okta shares last traded at $116.9480, with a volume of 3,559,076 shares traded.

The company reported $0.91 EPS for the quarter, beating analysts' consensus estimates of $0.85 by $0.06. The business had revenue of $765.00 million for the quarter, compared to the consensus estimate of $751.84 million. Okta had a return on equity of 4.18% and a net margin of 8.05%.The business's revenue for the quarter was up 11.2% on a year-over-year basis. During the same quarter in the prior year, the business posted $0.86 EPS. Okta has set its FY 2027 guidance at 3.790-3.870 EPS and its Q2 2027 guidance at 0.950-0.970 EPS.

Okta News Summary

Here are the key news stories impacting Okta this week:

• Positive Sentiment: Okta beat Q1 expectations with revenue of $765 million and adjusted EPS of $0.91, topping consensus and showing 11.2% year-over-year revenue growth. Okta (OKTA) Q1 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Management issued Q2 and full-year FY2027 guidance above or in line with estimates, reinforcing confidence in execution and future growth. Okta earnings report and conference call materials
• Positive Sentiment: Multiple firms raised targets after the earnings release, including JPMorgan to $114, BTIG to $119, Needham to $120, BMO to $120, Mizuho to $110, and Oppenheimer to $125, signaling stronger Street conviction. Analyst price target updates
• Positive Sentiment: Analysts highlighted improving enterprise momentum and AI-driven identity demand, which could expand Okta’s long-term market opportunity. Okta to Present at Upcoming Investor Conferences
• Neutral Sentiment: Okta announced it will present at upcoming investor conferences, which keeps management in front of investors but is not, by itself, a new operating catalyst. Okta to Present at Upcoming Investor Conferences

Analysts Set New Price Targets

Several analysts have recently weighed in on the stock. Susquehanna lifted their target price on shares of Okta from $80.00 to $110.00 and gave the company a "neutral" rating in a report on Friday. TD Cowen lowered their price objective on Okta from $115.00 to $105.00 and set a "hold" rating on the stock in a report on Tuesday, February 24th. Barclays boosted their target price on Okta from $90.00 to $93.00 and gave the stock an "overweight" rating in a research report on Thursday, May 14th. Wells Fargo & Company increased their target price on Okta from $76.00 to $85.00 and gave the stock an "equal weight" rating in a research note on Thursday, May 21st. Finally, Truist Financial raised their price target on Okta from $100.00 to $120.00 and gave the company a "buy" rating in a report on Friday. One investment analyst has rated the stock with a Strong Buy rating, thirty have issued a Buy rating, nine have given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus price target of $106.97.

Insider Transactions at Okta

In other Okta news, Director Shellye L. Archambeau sold 2,500 shares of the stock in a transaction on Monday, May 18th. The stock was sold at an average price of $85.00, for a total transaction of $212,500.00. Following the sale, the director owned 9,192 shares in the company, valued at approximately $781,320. This represents a 21.38% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Larissa Schwartz sold 1,054 shares of the firm's stock in a transaction on Thursday, May 7th. The stock was sold at an average price of $80.00, for a total value of $84,320.00. Following the transaction, the insider directly owned 48,448 shares of the company's stock, valued at $3,875,840. The trade was a 2.13% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 70,884 shares of company stock worth $5,625,648 in the last quarter. Insiders own 4.61% of the company's stock.

Institutional Trading of Okta

Several hedge funds and other institutional investors have recently added to or reduced their stakes in OKTA. Integrated Wealth Concepts LLC acquired a new stake in shares of Okta during the 1st quarter worth $225,000. NewEdge Advisors LLC increased its holdings in shares of Okta by 853.4% in the 1st quarter. NewEdge Advisors LLC now owns 5,530 shares of the company's stock worth $582,000 after acquiring an additional 4,950 shares during the period. Sivia Capital Partners LLC acquired a new stake in shares of Okta in the 2nd quarter worth approximately $244,000. Invesco Ltd. raised its holdings in shares of Okta by 34.1% in the 2nd quarter. Invesco Ltd. now owns 430,844 shares of the company's stock worth $43,071,000 after purchasing an additional 109,614 shares in the last quarter. Finally, EverSource Wealth Advisors LLC grew its position in Okta by 122.7% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 1,621 shares of the company's stock worth $162,000 after purchasing an additional 893 shares in the last quarter. Hedge funds and other institutional investors own 86.64% of the company's stock.

Okta Price Performance

The stock has a market cap of $20.55 billion, a PE ratio of 88.32, a P/E/G ratio of 3.49 and a beta of 0.59. The business has a 50 day simple moving average of $79.01 and a 200 day simple moving average of $82.69.

Okta Company Profile

Okta, Inc is a publicly traded provider of identity and access management solutions, headquartered in San Francisco, California. Founded in 2009 by Todd McKinnon and Frederic Kerrest, the company completed its initial public offering in April 2017. Under the leadership of McKinnon as chief executive officer and Kerrest as chief operating officer, Okta has grown into a leading vendor in the cybersecurity space, focusing on secure user authentication, single sign-on and lifecycle management for digital identities.

At the core of Okta's offering is the Okta Identity Cloud, a suite of cloud-native services that enable organizations to manage user access across web and mobile applications, on-premises systems and APIs.

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