From Yahoo Finance: 2025-05-31 18:00:00

Okta reported strong fiscal Q1 results, but conservative guidance caused a stock drop. The company continues to innovate and sees promise in its new go-to-market strategy. Despite the drop, the stock is up 35% year to date. Okta’s revenue for Q1 was $688 million, exceeding its forecast.

Management’s cautious guidance reflects uncertainty around tariffs and the economy. Okta maintained its full-year revenue forecast at $2.85 billion to $2.86 billion, with adjusted EPS outlook raised. The company focuses on newer products and security posture to address evolving threats.

Okta’s net dollar retention rate stands at 106%, indicating growth. Customers with ACVs above $100,000 rose 7%, and those with ACVs over $1 million increased by 20%. The company’s RPO backlog grew, showing future revenue potential. For fiscal Q2, Okta expects a 10% revenue increase.

While cautious in guidance, Okta is navigating a complex cybersecurity landscape impacted by AI. The company is innovating to counter evolving threats. With a reasonable P/S ratio, Okta presents a good investment opportunity. The company’s AI-driven growth strategy aligns with industry trends.

Before investing in Okta, consider other top stocks recommended by The Motley Fool. The company’s performance reflects its focus on innovation and growth. Okta’s recent dip in stock price presents a potential buying opportunity for investors.

Read more: After a Sharp Rally, Okta Stock Pulls Back on Cautious Outlook — Time to Buy the Dip?