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Wednesday saw Canaccord Genuity update its stance on Okta, Inc (NASDAQ:OKTA), raising the price target from $100 to $115, while maintaining a Hold rating on the company’s shares. The firm’s analysts attribute this change to Okta’s strong positioning as a leader in the burgeoning Zero Trust security market, which has a total addressable market (TAM) of approximately $80 billion. The stock has shown remarkable momentum, gaining over 64% in the past six months and currently trading near its 52-week high of $127.57.
The research firm underscored Okta’s potential as a long-term player in the identity security space, driven by the company’s next-generation technology and consolidating role. With impressive gross profit margins of 76.32% and revenue growth of 15.33%, Okta demonstrates strong operational efficiency. Despite the optimistic outlook on the company’s market position and growth prospects, Canaccord Genuity opted to stay cautious, keeping the Hold rating unchanged. InvestingPro analysis reveals 13 additional key insights about Okta’s performance and potential.
The revised price target of $115 is based on a valuation of approximately 6 times enterprise value to revenue (EV/R) and 21 times enterprise value to free cash flow (EV/FCF) on Canaccord’s 2026 estimates. This adjustment reflects a more bullish view on Okta’s financial performance and market trajectory over the next year. According to InvestingPro’s Fair Value analysis, Okta appears slightly undervalued, with a "GOOD" overall Financial Health score.
Canaccord’s analysis suggests that while Okta is well-placed to capitalize on the increasing adoption of Zero Trust security frameworks, the firm recommends investors to hold their positions at the current time. The decision to maintain the Hold rating indicates that the analysts see the stock as fairly valued at present, with the price target adjustment serving to align the valuation with the company’s growth metrics and market opportunities.
Investors and market watchers will likely monitor Okta’s performance closely, particularly in light of the expanding need for robust identity security solutions in an increasingly digital and security-conscious business environment.
In other recent news, Okta, Inc. reported first-quarter fiscal year 2026 results that exceeded analyst expectations, with strong performance in revenue, calculated remaining performance obligations (cRPO), operating margin, and earnings per share (EPS). Despite these positive results, Okta’s guidance for upcoming cRPO growth was conservative, reflecting macroeconomic caution. Cantor Fitzgerald maintained an Overweight rating with a $130 price target, highlighting Okta’s momentum in new product areas and robust growth in the Customer Identity Cloud. Mizuho (NYSE:MFG) Securities also reaffirmed an Outperform rating but adjusted its price target to $130, citing Okta’s solid start to the fiscal year and sustained momentum with large customers. Wolfe Research, while lowering its price target to $130 from $140, maintained an Outperform rating, projecting potential upside to revenue and free cash flow margin outlooks. Guggenheim reduced its price target to $138 but kept a Buy rating, noting a decline in New Annual Contract Value despite better-than-expected quarterly results. These developments underscore Okta’s strategic positioning in the identity management market amid ongoing economic uncertainties.
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