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On Monday, BMO Capital Markets adjusted its outlook on Okta, Inc. (NASDAQ:OKTA), a prominent identity management company, by increasing its price target from $105.00 to $130.00. The firm maintained its Market Perform rating on the stock. Analysts at BMO cited improved execution and growth in the company’s Current Remaining Performance Obligations (CRPO) and Remaining Performance Obligations (RPO) as key factors for the more optimistic target. The company’s stock has shown remarkable momentum, with InvestingPro data showing a 29% return in the past week alone.
The BMO Capital analyst acknowledged that over the past few years, their stance on Okta was cautious due to concerns about the company’s ability to execute, especially regarding product expansions. The recent solid execution and financial growth have now shifted their perspective to a more positive outlook on Okta’s shares, despite the stock’s recent run-up in price. InvestingPro data reveals impressive fundamentals, including a 76.32% gross profit margin and a "GREAT" overall financial health score. According to InvestingPro Tips, the company holds more cash than debt on its balance sheet, with 27 analysts recently revising their earnings expectations upward.
The identity market, according to the analyst, is expected to experience sustained growth and convergence, which should benefit Okta. This market trend acts as a tailwind, supporting the company’s prospects. Nevertheless, BMO Capital has chosen to retain the Market Perform rating while continuing to evaluate Okta’s competitive position, its capacity to maintain effective execution, and the firm’s own estimates.
The raised price target reflects a newfound confidence in Okta’s strategic direction and its ability to capitalize on favorable market conditions. The analyst’s comments suggest that while there is recognition of Okta’s progress, there is also a degree of caution as BMO Capital monitors the company’s performance in a competitive landscape.
In other recent news, Okta, Inc. reported significant financial achievements, including a 13% year-over-year revenue increase and a 25% growth in Remaining Performance Obligations (RPO) for the fourth quarter of fiscal year 2025. RBC Capital Markets and Stifel both raised their price targets for Okta to $120, citing robust quarterly results and an accelerated growth trajectory in RPO and current RPO. Piper Sandler also increased its price target to $135, maintaining an Overweight rating due to Okta’s strong fiscal fourth quarter performance and positive outlook for 2026. KeyBanc Capital Markets reiterated its Overweight rating with a price target of $135, highlighting Okta’s steady go-to-market execution and opportunities for expansion within its enterprise customer base. TD Cowen maintained a Hold rating with a $110 target, noting Okta’s impressive Rule-of-54 performance and guidance for continued strong revenue growth and free cash flow margins. The firm’s strategic focus on comprehensive platform solutions and security is seen as a key factor in meeting market demand. These developments underscore Okta’s potential for sustained growth in the expanding cybersecurity landscape.
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