On Tuesday, Bernstein, a research firm, revised its price target for Okta, Inc. (NASDAQ: NASDAQ:OKTA), a leading identity management company, reducing it from $129.00 to $124.00. Despite this adjustment, the firm continues to hold an Outperform rating on the stock.
According to InvestingPro data, Okta currently trades at $84.76, with analyst targets ranging from $75 to $140, suggesting significant potential upside. The company maintains impressive gross profit margins of 76%.
The price target revision follows a recent meeting between Bernstein analysts and Okta's leadership team, which took place last week as part of Bernstein's annual West Coast Software (ETR:SOWGn) Bus Tour. This meeting was timely, occurring shortly after Okta's earnings report and Bernstein's decision to upgrade the stock to an Outperform rating. InvestingPro analysis shows that 37 analysts have revised their earnings upward for the upcoming period, while the company's revenue grew by 16.8% in the last twelve months.
Bernstein's analysts had the opportunity to discuss several key assumptions underlying their financial model for Okta. The topics of interest included the sustainability of Okta's product up-sell and cross-sell strategies, the timing of what they refer to as "the bottom," the expected pace of contract recovery after this point, and insights into the company's guidance methodology for the upcoming fiscal year.
The analysts' confidence in their Outperform call was reinforced by their analysis, which indicated that even in a downside scenario, there would be more than 20% upside potential for Okta's shares. The recent meeting with Okta's executives provided further clarity and helped in refining the confidence level in their projections.
The new price target of $124.00 reflects Bernstein's adjusted expectations but still suggests a belief in the strong future performance of Okta's shares. The firm's stance remains positive, with the expectation that Okta's strategic initiatives and market position will continue to drive growth.
In other recent news, Okta, Inc. has been the subject of multiple analyst updates following strong third-quarter results. The company reported a 14% revenue increase and a 13% rise in calculated remaining performance obligations (cRPO) growth. Firms such as BMO Capital and Piper Sandler maintained their Market Perform and Neutral ratings respectively, while adjusting their price targets for Okta.
Despite these positive adjustments, Okta's initial revenue guidance for fiscal year 2026 suggests a conservative 7% year-over-year growth. Analysts from Citi and KeyBanc also expressed a positive outlook on Okta's role in the identity services sector but maintained their Neutral and Sector Weight ratings due to profitability concerns and potential disruptions from imminent go-to-market strategy changes.
Needham, Scotiabank (TSX:BNS), and Truist Securities also raised their price targets while maintaining their Buy, Sector Perform, and Hold ratings respectively. These recent developments underscore Okta's strong performance and its position as a dominant player in the identity management market.
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