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On Tuesday, BTIG analyst Gray Powell adjusted the price target for Okta, Inc (NASDAQ:OKTA) to $123.00, up from the previous target of $110.00, while reiterating a Buy rating on the shares. The revision followed Okta’s impressive fourth-quarter performance, which exceeded expectations, particularly in terms of calculated remaining performance obligations (CRPO). According to InvestingPro data, 36 analysts have recently revised their earnings estimates upward, with price targets ranging from $75 to $140. The stock, currently trading at $87.16, appears undervalued based on InvestingPro’s Fair Value analysis.
Okta reported a CRPO of $2,248 million, marking a 15% year-over-year increase in the fourth quarter of fiscal year 2025, surpassing both BTIG’s estimate of $2,135 million and the consensus estimate of $2,138 million. This quarter represented the most significant positive variance in CRPO since BTIG started monitoring the metric against street expectations in mid-2020.
The company’s operating income, earnings per share (EPS), and free cash flow (FCF) for the quarter were also significantly higher than both BTIG’s and street forecasts. The strength was widespread, with both workforce and customer identity segments performing well, alongside an uptick in large deal momentum, new product traction, and better cross-sell and up-sell activities.
Looking ahead, Okta’s guidance for fiscal year 2026 suggests continued robust performance. The midpoint of the company’s revenue guidance for FY26 is now set at $2,855 million, a 9.4% increase year-over-year, which is more optimistic than BTIG’s prior estimate of $2,786 million and the street’s $2,790 million.
The improvement in Okta’s outlook and performance is indicative of the company’s recovery from the challenges posed by a security breach in November 2023. BTIG also highlighted the potential of Okta’s new product initiatives, particularly in governance.
In light of these strong indicators, BTIG has increased its FY26 revenue estimate for Okta to $2,859 million, reflecting a 9.6% growth from the previous forecast. The firm also suggested that Okta could potentially achieve even higher growth, possibly around 13%, as the year progresses, leading to the raised price target of $123 per share.
In other recent news, Okta, Inc. reported strong financial results for the fourth quarter of fiscal year 2025, surpassing both earnings and revenue expectations. The company recorded earnings per share of $0.78, exceeding the forecast of $0.74, and achieved revenue of $682 million, which was higher than the anticipated $668.91 million. Okta also reported record bookings that surpassed $1 billion in total contract value, and its free cash flow margin improved to 25%, up by approximately six points. Following these results, several analyst firms adjusted their outlook on Okta. Barclays (LON:BARC) increased its price target for Okta to $115, while maintaining an Equalweight rating, citing strong calculated remaining performance obligations (cRPO) as a key factor. Mizuho (NYSE:MFG) Securities upgraded Okta’s rating from Neutral to Outperform and raised the price target to $127, highlighting Okta’s robust cRPO growth and positive revenue projections for fiscal year 2026. DA Davidson also upgraded Okta’s stock rating to Buy, setting a new price target of $125, following the company’s impressive quarterly performance. These developments reflect growing confidence in Okta’s ability to sustain its growth trajectory, bolstered by its strong position in the identity management market and its expanding product offerings.
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