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On Tuesday, DA Davidson analysts upgraded Okta, Inc. (NASDAQ:OKTA) stock rating from Neutral to Buy, setting a new price target of $125, up from the previous $90. Currently trading at $87.16, with a market capitalization of $14.94 billion, the stock appears undervalued according to InvestingPro analysis. The upgrade followed Okta’s announcement of robust fiscal fourth-quarter results, which exceeded expectations.
The company’s calculated billings and remaining performance obligations (CRPO) saw an acceleration to a year-over-year increase of 15%, compared to 13% in the previous quarter and surpassing the guided 9%. This growth aligns with the company’s impressive revenue growth of 16.84% and robust gross profit margins of 76.12%. Management described the quarter’s performance as a "blowout" and expressed a highly positive outlook on the business, which has not been heard in years according to the analysts.
Okta’s sales productivity reached a multi-year peak during the quarter. The net dollar retention rate (DBNRR) is showing signs of stability, and contributions from enterprise customers and channel partners are increasing. Additionally, newer products are making a more significant impact on the company’s growth.
The analysts highlighted that double-digit growth for Okta now appears to be sustainable. This positive momentum, combined with the raised guidance for fiscal year 2026, underpinned the decision to upgrade the stock and increase the price target. The revised price target of $125 reflects a significant increase from the former target of $90, indicating a strong confidence in the company’s growth trajectory. InvestingPro data reveals 36 analysts have revised their earnings upward for the upcoming period, with additional insights available in the comprehensive Pro Research Report covering 1,400+ top stocks.
In other recent news, Okta Inc . reported impressive fourth-quarter results for fiscal year 2025, surpassing both earnings and revenue projections. The company announced earnings per share of $0.78, exceeding the forecast of $0.74, and achieved revenue of $682 million, surpassing the anticipated $668.91 million. Okta’s record bookings surpassed $1 billion in total contract value, and the company improved its free cash flow margin to 25%, up approximately 6 points. Additionally, Okta’s customer base with $1 million-plus annual contract value customers increased by 22% to 470, reflecting robust growth in its identity security market.
In further developments, Okta’s stock experienced a significant surge following the earnings announcement. The company also provided guidance for fiscal year 2026, projecting total revenue growth of 9-10% and a non-GAAP operating margin of 25%. Analysts have noted Okta’s strategic investments in product innovation and security, with a focus on expanding its capabilities in AI identity management.
Lastly, Okta has been recognized for its partnership with AWS Marketplace, where revenue grew over 80% in fiscal year 2025. The company continues to strengthen its go-to-market strategy by further specializing its sales teams to better serve customer needs.
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