Okta (OKTA) AI Stock Analysis

• Market Cap: $14.94B
• Dividend Yield: N/A
• Average Volume (3M): 3.01M
• Price to Earnings (P/E): 1886.9
• Beta (1Y): 1.51
• Revenue Growth: 15.33%
• EPS Growth: N/A
• Country: US
• Employees: 5,908
• Sector: Technology
• Sector Strength: 48
• Industry: Software
• EPS (TTM): 0.06
• Shares Outstanding: 163,604,690
• 10 Day Avg. Volume: 4,298,782
• 30 Day Avg. Volume: 3,013,634
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.90
• Price to Cash Flow (P/CF): 23.50
• P/FCF Ratio: 24.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $115.72
• Price Target Upside: 6.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 31

Okta's overall stock score reflects strong technical momentum and robust financial performance, particularly in cash flow generation and revenue growth. However, challenges in profitability and a high P/E ratio suggest caution. Positive earnings call highlights and recent corporate events support a favorable outlook, but the stock's valuation remains a key risk factor.

Positive Factors

Financial Performance

The company's strong performance in F4Q25 was highlighted by significant growth in revenue and operating margin, exceeding analyst expectations.

Guidance and Future Growth

Management's guidance for F1Q26 and FY26 indicates higher revenue and non-GAAP EPS than consensus estimates, suggesting confidence in future growth.

Negative Factors

Growth Concerns

The potential transition to single-digit growth remains a reality investors must reconcile.

Okta Business Overview & Revenue Model

Company Description

Okta, Inc. provides identity management services to enterprises. Its products include Single Sign-On, Adaptive Multi-Factor Authentication, Mobility Management, Lifecycle Management, Universal Directory, API access management, API products and integration network services.

How the Company Makes Money

Okta makes money primarily through a subscription-based revenue model. The company offers its products and services on a Software-as-a-Service (SaaS) basis, charging customers recurring fees for access to its cloud-based identity and access management solutions. Key revenue streams include subscriptions to its Identity Cloud platform, which encompasses a range of services such as Single Sign-On (SSO), Multi-Factor Authentication (MFA), Lifecycle Management, and API Access Management. Okta's revenue is further bolstered by professional services, which include training, implementation, and consulting services to help clients effectively integrate and optimize Okta's solutions. The company also benefits from significant partnerships with technology vendors and service providers, which expand its reach and enhance its offerings by integrating with a wide array of applications and IT infrastructure.

Okta Financial Statement Overview

Summary

Okta shows strong revenue growth and cash flow generation, but persistent net losses and negative profit margins highlight challenges in profitability. The balance sheet is robust with low leverage, yet negative ROE due to losses remains a concern.

Income Statement

Okta's revenue shows a strong growth trajectory, with a significant increase in Total Revenue from $586 million in 2020 to $2.53 billion TTM (Trailing-Twelve-Months) in 2024. However, the company remains unprofitable with a negative Net Income and EBIT margin, indicating challenges in cost management despite the revenue growth. The gross profit margin remains healthy, but the negative net and EBIT margins reflect ongoing operational inefficiencies.

Balance Sheet

Okta's balance sheet is robust with a high Equity Ratio, indicating strong equity financing. The Debt-to-Equity ratio is low, showing manageable leverage levels. However, the company has a consistent history of losses, which is a risk to equity value. The Return on Equity is negative due to ongoing net losses, pointing to profitability challenges.

Cash Flow

Okta demonstrates strong cash flow capabilities, with a substantial increase in Operating Cash Flow and Free Cash Flow over the years. The Operating Cash Flow to Net Income ratio is positive, suggesting effective cash generation even with negative net income. Free Cash Flow growth is notable, reflecting efficient capital management despite the negative net income.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
1.93B	2.26B	1.86B	1.30B	835.42M	586.07M
	Gross Profit
1.47B	1.68B	1.31B	903.80M	617.74M	426.69M
	EBIT
-81.99M	-460.00M	-783.00M	-767.10M	-204.16M	-185.83M
	EBITDA
19.01M	-230.00M	-676.00M	-649.90M	-156.00M	-136.91M
	Net Income Common Stockholders
5.02M	-355.00M	-815.00M	-848.41M	-266.33M	-208.91M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.20B	2.20B	2.58B	2.50B	2.59B	1.40B
	Total Assets
8.99B	8.99B	9.31B	9.21B	3.30B	1.96B
	Total Debt
1.27B	1.27B	2.33B	2.00B	1.95B	1.09B
	Net Debt
932.00M	932.00M	2.07B	1.74B	1.51B	572.17M
	Total Liabilities
3.10B	3.10B	3.84B	3.28B	2.60B	1.55B
	Stockholders Equity
5.89B	5.89B	5.47B	5.92B	694.04M	405.34M
Cash Flow		Free Cash Flow
450.29M	488.00M	63.00M	87.36M	110.59M	27.68M
	Operating Cash Flow
464.29M	512.00M	86.00M	104.12M	127.96M	55.60M
	Investing Cash Flow
-137.18M	441.00M	-130.00M	-366.81M	-1.31B	-688.04M
	Financing Cash Flow
-87.27M	-883.00M	48.00M	89.07M	1.09B	853.38M

Okta Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 108.31
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OKTA, the sentiment is Positive. The current price of 108.31 is above the 20-day moving average (MA) of 95.07, above the 50-day MA of 89.52, and above the 200-day MA of 85.77, indicating a bullish trend. The MACD of 1.08 indicates Positive momentum. The RSI at 70.40 is Negative, neither overbought nor oversold. The STOCH value of 43.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OKTA.

Okta Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZS	80 Outperform	$29.74B	―	-2.54%	―	30.77%	79.05%
CRWD	78 Outperform	$96.10B	770.46	4.14%	―	31.35%	―
ZM	73 Outperform	$22.64B	23.40	11.92%	―	3.05%	55.96%
NOW	71 Outperform	$186.65B	132.46	14.83%	―	22.44%	-18.31%
OKTA	68 Neutral	$14.94B	1,886.93	78.42%	―	15.33%	―
TWLO	68 Neutral	$17.52B	―	-1.24%	―	7.32%	88.51%
Sector *	59 Neutral	$22.39B	11.53	-18.05%	2.31%	5.00%	-25.89%

Okta Corporate Events

Okta Reports Record Profitability and Revenue Growth

On March 3, 2025, Okta announced its financial results for the fourth quarter and fiscal year ending January 31, 2025, showcasing significant growth and record profitability. The company reported a 13% year-over-year increase in total revenue for the fourth quarter, with subscription revenue also rising by 13%. Remaining performance obligations grew by 25%, indicating strong future revenue potential. Okta achieved record operating cash flow of $286 million and free cash flow of $284 million, reflecting its robust financial health. The results underscore Okta’s strategic positioning in the identity management industry, as it continues to innovate and meet the security needs of its customers.

Okta Appoints Eric Kelleher as President and COO

Okta, Inc. has appointed Eric Kelleher as its new President and Chief Operating Officer, effective February 1, 2025. Kelleher, who has been with Okta since 2016, previously held several leadership positions within the company and has extensive experience in the SaaS industry. He will be tasked with overseeing various operational teams and driving growth as Okta continues to lead in identity and cybersecurity solutions. The appointment coincides with Eugenio Pace’s retirement from the role of President, Business Operations. Kelleher’s new role is expected to bolster Okta’s focus on operational excellence and customer satisfaction, thereby enhancing its market position and growth prospects.