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On Tuesday, Bernstein SocGen Group updated their assessment of Okta, Inc. (NASDAQ:OKTA), raising the price target from $124.00 to $132.00, while reiterating an Outperform rating on the company’s shares. Currently trading at $87.16, InvestingPro analysis suggests the stock is undervalued. The adjustment follows Okta’s fourth fiscal quarter of 2025 results, which surpassed expectations and provided a positive outlook for the upcoming year.Discover deeper insights with InvestingPro, which offers 8 additional key investment tips for Okta and comprehensive analysis of over 1,400 US stocks.
Okta reported a revenue of $682 million, which was a $14 million increase over the guidance. The company maintains impressive gross profit margins of 76.32% and has achieved 15.33% revenue growth over the last twelve months. Based on these results, the company raised its full-year fiscal 2026 revenue forecast by $80 million compared to the early guidance given at the third-quarter earnings report, with analysts expecting 15% revenue growth. The analyst, Peter Weed, highlighted Okta’s successful quarter, noting that the company is moving past the challenging post-COVID renewal period, which is expected to end by mid-year.
The company’s new Governance product has achieved a $100 million annual recurring revenue (ARR) milestone, and customer identity growth is now outpacing worker identity growth. Additionally, the number of net new customers spending over $100,000 has increased for the fourth consecutive quarter. These factors contributed to the company’s calculated remaining performance obligations (cRPO) accelerating year-over-year (YoY) for the first time since the first quarter, reaching a 15% increase, while overall remaining performance obligations (RPO) grew an impressive 25%.
Bernstein’s revised price target is based on a more optimistic view of Okta’s revenue rebound, driven by stronger-than-anticipated fourth-quarter net retention rate (NRR), and an improved margin guidance. The company maintains a "GOOD" Financial Health Score of 2.76 according to InvestingPro analysis. The price target calculation utilized a 50/50 combination of a multiples regression approach, based on approximately 9 times price to next twelve months (NTM) revenue, and a discounted cash flow (DCF) analysis, which assumes around a 12% weighted average cost of capital (WACC) and a 3% terminal growth rate.Access the complete Pro Research Report and detailed financial metrics for Okta and 1,400+ other stocks with an InvestingPro subscription.
Okta’s recent performance and forward-looking statements have painted a picture of a company on the upswing, with a strong product pipeline and improving financial metrics. As a result, Bernstein SocGen Group remains confident in Okta’s prospects, maintaining an Outperform rating and a higher price target for the company’s stock.
In other recent news, Okta, Inc. reported impressive fourth-quarter results, surpassing both analyst estimates and its own previous guidance. The company’s Remaining Performance Obligations (RPO) grew by 25% year-over-year, reaching $4.2 billion, which significantly outpaced revenue growth. Analysts from Canaccord Genuity, Citi, JPMorgan, Wolfe Research, and Evercore ISI responded positively, adjusting their price targets to reflect Okta’s strong performance, with targets ranging from $100 to $122. Canaccord Genuity highlighted Okta’s revised fiscal year 2026 guidance, which anticipates a 9-10% growth rate, higher than initially expected.
Citi noted Okta’s exceptional free cash flow results and a fivefold increase in annual contract value logos worth $1 million. JPMorgan emphasized Okta’s strong sales productivity and robust performance across all business segments, maintaining an Overweight rating. Wolfe Research pointed out Okta’s significant progress with channel partners and high operating margins, while Evercore ISI initiated coverage with an Outperform rating, citing improved execution and partner contributions. Despite a slight miss in Current Remaining Performance Obligations bookings, Okta’s outlook remains optimistic, with increased guidance for fiscal year 2026 and expectations of continued growth in identity management solutions.
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