Okta (NASDAQ:OKTA) Shares Gap Up - What's Next?

Key Points

• Okta shares gapped up at the open from $67.35 to $71.10 and last traded around $70.96 on Thursday, with about 838,394 shares changing hands.
• The company beat estimates with $0.90 EPS vs. $0.85 expected and $761M revenue (+11.6% y/y), provided FY2027 EPS guidance of 3.740–3.820, and carries a consensus "Moderate Buy" analyst rating with an average target of about $101.81.
• Okta's board authorized a $1 billion share buyback (up to 6.8% of shares) even as insiders sold roughly 63,843 shares (~$5.07M) in the past three months.

Okta, Inc. (NASDAQ:OKTA - Get Free Report) gapped up before the market opened on Thursday . The stock had previously closed at $67.35, but opened at $71.10. Okta shares last traded at $70.9640, with a volume of 838,394 shares traded.

Wall Street Analyst Weigh In

OKTA has been the subject of several recent analyst reports. Morgan Stanley dropped their price objective on shares of Okta from $110.00 to $101.00 and set an "overweight" rating for the company in a research note on Thursday, March 5th. Needham & Company LLC dropped their price objective on shares of Okta from $110.00 to $90.00 and set a "buy" rating for the company in a research note on Thursday, March 5th. HSBC raised shares of Okta to a "buy" rating in a research note on Thursday. Raymond James Financial raised shares of Okta from a "market perform" rating to an "outperform" rating and set a $85.00 price objective for the company in a research note on Thursday. Finally, DA Davidson reaffirmed a "buy" rating and set a $110.00 price objective on shares of Okta in a research note on Thursday, March 5th. Twenty-eight investment analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and three have assigned a Sell rating to the stock. According to MarketBeat, Okta currently has a consensus rating of "Moderate Buy" and an average target price of $101.81.

Okta Price Performance

The firm has a market capitalization of $12.78 billion, a P/E ratio of 54.95, a P/E/G ratio of 2.51 and a beta of 0.76. The firm has a 50-day moving average price of $77.84 and a two-hundred day moving average price of $84.39.

Okta (NASDAQ:OKTA - Get Free Report) last released its earnings results on Wednesday, March 4th. The company reported $0.90 earnings per share for the quarter, topping the consensus estimate of $0.85 by $0.05. Okta had a return on equity of 4.18% and a net margin of 8.05%.The business had revenue of $761.00 million during the quarter, compared to the consensus estimate of $749.87 million. During the same period last year, the company earned $0.78 earnings per share. The business's revenue for the quarter was up 11.6% compared to the same quarter last year. Okta has set its FY 2027 guidance at 3.740-3.820 EPS and its Q1 2027 guidance at 0.840-0.860 EPS. Sell-side analysts predict that Okta, Inc. will post 0.42 earnings per share for the current fiscal year.

Okta announced that its board has authorized a stock repurchase program on Monday, January 5th that allows the company to buyback $1.00 billion in shares. This buyback authorization allows the company to purchase up to 6.8% of its stock through open market purchases. Stock buyback programs are usually an indication that the company's management believes its shares are undervalued.

Insiders Place Their Bets

In related news, insider Larissa Schwartz sold 6,377 shares of Okta stock in a transaction dated Tuesday, April 7th. The stock was sold at an average price of $79.75, for a total value of $508,565.75. Following the completion of the sale, the insider directly owned 54,825 shares in the company, valued at $4,372,293.75. The trade was a 10.42% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Todd Mckinnon sold 11,263 shares of Okta stock in a transaction dated Monday, March 23rd. The shares were sold at an average price of $81.01, for a total value of $912,415.63. Following the completion of the sale, the chief executive officer owned 97,083 shares of the company's stock, valued at $7,864,693.83. The trade was a 10.40% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 63,843 shares of company stock valued at $5,071,889 in the last three months. 5.68% of the stock is owned by company insiders.

Hedge Funds Weigh In On Okta

A number of large investors have recently added to or reduced their stakes in the company. Root Financial Partners LLC purchased a new stake in shares of Okta during the third quarter worth about $26,000. Elevation Wealth Partners LLC grew its stake in shares of Okta by 825.0% during the fourth quarter. Elevation Wealth Partners LLC now owns 296 shares of the company's stock worth $26,000 after acquiring an additional 264 shares during the last quarter. SHP Wealth Management purchased a new stake in shares of Okta during the fourth quarter worth about $27,000. Torren Management LLC purchased a new stake in shares of Okta during the fourth quarter worth about $32,000. Finally, Aster Capital Management DIFC Ltd purchased a new stake in shares of Okta during the third quarter worth about $34,000. 86.64% of the stock is currently owned by institutional investors.

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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