Bernstein maintains Okta stock Outperform with $132 target

On Wednesday, Bernstein SocGen Group maintained a positive stance on Okta, Inc (NASDAQ: NASDAQ:OKTA), reiterating an Outperform rating and a price target of $132.00. The target aligns closely with InvestingPro’s Fair Value calculation, with the stock currently trading near its 52-week high of $127.57 after an impressive 64.22% gain over the past six months. The firm’s analysis followed Okta’s first-quarter results for fiscal year 2026, which showed the company delivering on its previous earnings promise of less conservative guidance. Despite the close alignment with expectations, with a 1.3% beat versus the midpoint guidance compared to the 2%+ beats in the fiscal year 2025 quarters, Okta did not raise its full-year guidance for fiscal year 2026 even after surpassing its target. The company maintains strong fundamentals with a 76.32% gross profit margin and 15.33% revenue growth over the last twelve months.

The company’s decision not to adjust its full-year outlook was attributed to the increasingly uncertain macroeconomic environment and the recent clarity on the impact from DOGE, which was not fully apparent until after the last earnings call in late February 2025. This announcement led to a more than 10% drop in Okta’s stock in after-hours trading.

Bernstein’s analyst cited a lowered near-term revenue forecast due to the guidance provided, particularly the impact from DOGE. However, the long-term outlook for fiscal year 2027 and beyond was maintained. The price target of $132 was upheld using a 50/50 rule, which includes a multiples regression based on a ~9x Price to Next (LON:NXT) Twelve Months (NTM) revenue and a Discounted Cash Flow (DCF) analysis with an approximate 12% Weighted Average Cost of Capital (WACC) and a 3% terminal growth rate.

The analyst’s comments highlighted a cautious approach to the near-term revenue expectations but retained confidence in the company’s performance in the longer term. Bernstein’s continued Outperform rating indicates their belief in Okta’s potential despite the recent stock price decline and the conservative guidance for the remainder of the fiscal year. InvestingPro analysis reveals 13 additional key insights about Okta’s valuation and performance metrics, available in the comprehensive Pro Research Report, which provides deep-dive analysis of this $21.97 billion market cap company.

In other recent news, Okta, Inc. reported strong fiscal first-quarter results, surpassing its own guidance on key metrics, although its calculated remaining performance obligations (cRPO) growth fell slightly short of market expectations. Stifel raised its price target for Okta to $130, maintaining a Buy rating, while Needham also increased its target to $125, citing Okta’s market expansion strategies and new product introductions. Loop Capital reaffirmed a Buy rating with a $140 target, noting Okta’s strategic focus on large enterprises and potential growth driven by AI-driven demand in cybersecurity. Conversely, Scotiabank (TSX:BNS) adjusted its price target to $115, maintaining a Sector Perform rating, and highlighted a slowdown in cRPO growth amid a cautious financial outlook due to macroeconomic uncertainties.

Susquehanna maintained a Neutral rating with a $105 target, acknowledging Okta’s solid position in the Identity and Access Management sector while noting macroeconomic concerns. Despite the strong start to the year, Okta’s management has taken a conservative approach to guidance for the second quarter, factoring in broader economic conditions. Analysts from various firms have recognized Okta’s competitive edge and profitability improvements but are waiting for consistent revenue growth before making more optimistic predictions. Okta’s management remains cautiously optimistic, with a focus on maintaining its full-year revenue guidance and improving profitability. These developments reflect a mixed but generally positive outlook from analysts, with varying degrees of optimism about Okta’s future performance.

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