Canaccord Genuity upgrades Okta stock rating to Buy on identity security potential

Investing.com - Canaccord Genuity upgraded Okta, Inc (NASDAQ:OKTA) from Hold to Buy and raised its price target to $120.00 from $115.00. The upgrade aligns with broader market sentiment, as InvestingPro data shows 41 analysts have recently revised their earnings estimates upward, with the stock currently trading below its Fair Value.

The upgrade reflects Canaccord’s view that Okta’s business is "beginning to turn the corner" after what it described as "less-than-stellar" performance in recent quarters.

Canaccord cited potential benefits from Okta’s Privileged Access Management (PAM) and Identity Governance and Administration (IGA) product lines, particularly as competitive mergers and acquisitions create market disruptions.

The firm highlighted Okta as "a unique identity security platform asset in public markets with real take-out potential" from strategic buyers or private equity firms, especially following the Palo Alto Networks/CyberArk transaction.

Canaccord’s new price target represents 6x EV/CY26E Sales and 22x EV/CY26E FCF, with the firm noting a favorable risk/reward profile at current valuation levels of 16.5x EV/CY26E FCF, supported by enterprise prioritization of identity security and emerging artificial intelligence opportunities.

In other recent news, Okta, Inc. has been the focus of several developments. Cantor Fitzgerald reiterated its Overweight rating on the company, maintaining a price target of $130. This evaluation is based on a 2026 estimated enterprise value to sales target multiple of 7.6x. Meanwhile, Jefferies adjusted its price target for Okta to $100 from $105, citing pressure in the small and medium-sized business sector. Despite this, Jefferies anticipates Okta’s second-quarter contracted remaining performance obligations to potentially exceed guidance. TD Cowen also maintained a Hold rating with a $115 price target, expecting Okta to meet expectations in its upcoming earnings report. Additionally, Okta announced the appointment of David Schellhase and Maggie Wilderotter to its board of directors, enhancing its leadership team. The company further expanded its partnership with Palo Alto Networks, introducing new security integrations to bolster threat response and secure application access. These developments highlight Okta’s ongoing strategic initiatives and market positioning.

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