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On Monday, Cantor Fitzgerald began coverage on shares of Okta, Inc. (NASDAQ:OKTA), assigning an Overweight rating and setting a price target of $130. The research firm highlighted Okta’s position as a leader in the identity security sector, despite recent growth hurdles the company has faced. According to InvestingPro data, Okta has shown impressive momentum with a 45% return over the past six months, while maintaining a "GOOD" overall financial health score. After a period of robust growth, with a compound annual growth rate (CAGR) of 41.5% from the fiscal year 2019 to 2024, Okta’s revenue growth decelerated to 15% in fiscal year 2025, with projections of just 10% growth in fiscal year 2026.
The firm’s current valuation, trading at 6.0x fiscal year 2026 estimated enterprise value to sales (EV/Sales), is seen as a reflection of investor concerns over its expansion, especially when compared to its competitors’ 8.4x multiple. Current InvestingPro metrics show the stock trading at high multiples, with a P/E ratio of 656x and an EV/EBITDA of 688x, suggesting investors are pricing in significant future growth potential. InvestingPro subscribers have access to 12 additional key insights about Okta’s valuation and growth prospects. Cantor Fitzgerald analysts noted that the challenging macroeconomic climate and the natural maturation of the company are factors in the slowdown, but they also pointed out that Okta is actively taking steps to rekindle growth.
Okta’s strategy to reinvigorate its business includes increasing adoption among large enterprises, enhancing its product lines, and expanding more into international markets. The analysts anticipate that new marketing strategies focusing on Okta/Auth0 and upselling, as well as an improving partner ecosystem, could provide a boost to sales productivity and potentially lead to better-than-expected performance. Recent financial data from InvestingPro supports this outlook, showing impressive gross profit margins of 76.3% and revenue growth of 15.3% in the last twelve months. For deeper insights into Okta’s financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
The firm’s historical approach to growth through aggressive acquisitions, combined with its strong balance sheet, suggests that it could continue to pursue strategic deals. Cantor Fitzgerald also forecasts healthy margins for Okta, projecting 25% operating margins and 26% free cash flow (FCF) margins for fiscal year 2026. The analysts expressed confidence in Okta’s leadership team, which they believe is capable of driving a significant demand inflection with its continuous innovation. The $130 price target is based on a 7.6x multiple of EV to fiscal year 2026 estimated revenue.
In other recent news, Okta, Inc. reported a strong close to fiscal year 2025 with a 13% year-over-year revenue increase and a 25% growth in Remaining Performance Obligations (RPO). Analysts have responded positively to these results, with RBC Capital Markets raising its price target to $120 from $115 and maintaining an Outperform rating, while Stifel also increased its price target to $120, citing Okta’s robust fourth-quarter performance. BMO Capital Markets adjusted its price target to $130, noting improved execution and growth in Okta’s performance obligations. KeyBanc Capital Markets maintained an Overweight rating with a $135 price target, expressing confidence in Okta’s growth trajectory and strategic positioning.
TD Cowen maintained a Hold rating with a $110 price target, acknowledging Okta’s impressive financial health and fiscal year 2026 guidance, which projects a 9% to 10% revenue increase. The company’s recent financial quarter has been highlighted as a potential turning point, with analysts noting accelerated growth in key performance metrics. Okta’s strategic focus on security and innovation, alongside its expanding product portfolio, is seen as a driver for future growth. These developments reflect a positive outlook from analysts, who are cautiously optimistic about Okta’s ability to capitalize on market opportunities.
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