A 7% jump in Thursday’s session was enough to make shares of Okta (NASDAQ: OKTA
) among the best performing of US equities on the day. They’ve now jumped more than 20% in the past month and look to be well on their way to reversing the damage done during last quarter’s correction.
That 30% dip was in many ways reminiscent of a similar one almost twelve months ago to the day, and it only took until the middle of April last time for Okta shares to get back above their pre-correction levels. This time, there are several fundamental factors in play that should allow the comparison to hold strong
Much of this week’s jump has come off the back of the company’s recent investor day which saw management reaffirming their quarter and full-year guidance. In addition to this, they announced two key product launches which Wall Street was quick to see the upside on. As we’ve seen in the share price since, there’s nothing like some solid reassurance and roadmap updates from leadership to make investors feel the warm and fuzzies after a period of selling.
Keith Bachmann at BMO sees the updates increasing Okta’s total addressable market by as much as $15 billion, with a ton of potential there for Okta to maintain long-lasting growth. He maintained his Outperform rating and $265 price target on shares, which suggests there’s upside of at least 10% from Thursday’s closing price.
For a $30 billion company whose Q4 numbers, reported last month, had revenue growing at 40% year on year, you’re inclined to think there’s some value to be had with Okta shares trading where they are. A recent run of high-profile security incidents has made their raison d'être all the more relevant, with few if any enterprise companies prepared to start cutting their spending on security. Last quarter’s announcement of the Auth0 acquisition is still being digested and this week’s guidance affirmation didn’t even include any upside from that side of things.
Auth0 will be bringing more than 10,000 customers with them and will put Okta’s identity management offering on a par with Microsoft’s (NASDAQ: MSFT). The 50% annual growth that Auth0 is also bringing to the table certainly won’t go amiss while Okta themselves can’t be said to be taking the foot off the gas either. The record 600 new customers they closed last quarter is testament to that.
Shares found decent support around the $210 level and have now started turning aggressively north. As they make their way through the $200s there’s a rising RSI and a bullish MACD crossover supporting them, making it hard to say they’re not in full rally mode.
For investors with a long-term horizon who are considering getting involved, Okta shares are giving a lot of good reasons to be considered right now. They’re a market leader in their field, printing record growth numbers and have a growing addressable market. Their shares are picking up a head of steam after a significant haircut last quarter, and considering the 130% rally they notched in just three months last time, you’d want to be very bearish on the industry to not be excited this time.
Featured Article: What is the Coverage Ratio?7 Cloud Computing Stocks to Lift Your Portfolio to New Heights
Cloud computing sounds complicated, and it has become more sophisticated as it evolves. However, the basic idea behind the cloud is the same. The “cloud” is a euphemistic term for the delivery of different services via the internet. In its early days, the cloud was used exclusively for data storage. Here’s an easy example of why this was important.
Back when the internet was cutting its teeth, I worked in marketing communications. The need to comply with Total Quality Control Systems (TQCS) for our largest clients meant we had to save every version of our files. Every. Single. One.
Now imagine that you’re producing a 120-page product catalog complete with photos and charts. Your hard drive is burning up just thinking about it. Yet that “data” had to be stored somewhere. And so we had a virtual server farm to try to warehouse all these graphic intensive (and memory sucking) files until we could archive them.
Other than the storage nightmare, consider that it was a pain to work remotely. You could copy a file from the server, but then were you working on the right file? I’m sure at least one person is reading this who remembers this pain.
The cloud takes that away. Cloud computing allows you to store files on a secure, remote server that everyone can access anywhere they have an internet connection. But it’s become so much more than that. Cloud computing now gives businesses a platform from which they can create applications and software. If that sounds confusing, I hope to simplify it in this presentation.
To help you understand which cloud computing stocks, you may want to add to your portfolio, and we’ve created this special presentation. These are seven of the cloud computing stocks that will continue to grow with the sector.
View the "7 Cloud Computing Stocks to Lift Your Portfolio to New Heights"
Companies Mentioned in This Article
Compare These Stocks
Add These Stocks to My Watchlist