From Nasdaq: 2025-05-29 11:48:00

Okta shares dropped 16.16% to $105.22 after reporting impressive earnings but slower growth expectations for second quarter fiscal 2026 and fiscal 2026. Revenue estimates for Q2 are $710-712 million, with 10% YoY growth, and for fiscal 2026 at $2.85-2.86 billion, with 9-10% growth. Non-GAAP earnings expected between 83-84 cents per share.

Zacks Consensus Estimate for Okta’s Q2 earnings is 79 cents per share, suggesting 9.72% YoY growth. For fiscal 2026, the estimate is $3.19 per share, indicating 13.52% growth over fiscal 2025. Okta’s earnings surpassed estimates in the last four quarters, with an average surprise of 13.53%.

Okta benefits from strong demand for identity solutions, with new products like Identity Governance and Privileged Access driving growth. The company has over 20,000 customers and $4.084 billion in RPOs. Okta AI and Auth0 platforms offer AI-powered capabilities and compatibility with various cloud infrastructures, contributing to revenue growth.

Despite a rich partner base and innovative portfolio, Okta shares are overvalued with a Value Score of F and trading at a premium compared to the sector. The stock is trading below the 50-day and 200-day moving averages, indicating a bearish trend. With a Zacks Rank #3 (Hold), investors should wait for a better entry point to accumulate the stock.

Zacks Investment Research names Okta as a stock with the potential to double, highlighting the company’s innovative financial solutions and fast-growing customer base. Director of Research Sheraz Mian points out Okta as a top pick with significant growth potential. Investors can access the full list of Zacks #1 Rank (Strong Buy) stocks for more opportunities.



Read more at Nasdaq: Okta Declines 16% Post Q1 Earnings: Buy, Sell or Hold the Stock?