Okta is expected to release strong Q3 earnings, benefiting from increased demand for identity solutions.

From Nasdaq: 2024-11-29 10:24:00

Okta (OKTA) is set to release third-quarter fiscal 2025 results on Dec. 3. The company anticipates non-GAAP earnings of 57-58 cents per share and revenues in the range of $648-$650 million, showing an 11% growth from the year-ago period.

For the third quarter, Okta’s earnings are estimated to grow by 29.55% to 57 cents per share, with revenues expected to increase by 11.20% to $649.42 million. The company has a history of beating earnings estimates, with an average surprise of 27.15% in the past four quarters.

Okta’s results are expected to benefit from the increased use of identity solutions and an expanding clientele. However, macroeconomic challenges and investments in key areas may have impacted subscription gross margins in the third quarter.

Okta shares have underperformed the Computer & Technology sector this year, with a Value Score of D indicating a stretched valuation. The stock is trading at a higher Price/Sales ratio compared to its industry peers, suggesting relative expensiveness.

The global demand for identity solutions is rising, driving growth in the cybersecurity market. Okta is well-positioned to capitalize on this trend, with a strong portfolio competing against industry leaders like Microsoft and IBM. The company’s partnerships and product offerings continue to drive its success in the cybersecurity domain.

Okta’s strategic partnership with NetHope aims to enhance cybersecurity in the nonprofit sector. Despite a challenging macroeconomic environment, Okta’s Growth Score of A makes it an attractive long-term investment. The stock currently holds a Zacks Rank #3 (Hold), suggesting a cautious approach for potential investors.



Read more at Nasdaq: Should You Buy, Hold or Sell OKTA Stock Ahead of Q3 Earnings?