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On Wednesday, Mizuho (NYSE:MFG) Securities adjusted its outlook on Okta Inc (NASDAQ:OKTA), reducing the price target to $130 from $135, while reaffirming an Outperform rating on the stock. The adjustment followed Okta’s report of a solid start to its fiscal year, with continued cRPO growth and management’s cautious guidance that takes potential macroeconomic risks into account. The company’s stock has shown remarkable momentum, with a year-to-date return of 59.26% according to InvestingPro data.
According to Mizuho, Okta’s current-year recognized revenue (cRPO) growth of 14% year-over-year outperformed the market’s expectation of 12%. The company’s management emphasized sustained momentum with large customers and the successful integration of newer products and Auth0, a platform for customer identity and access management (CIAM). With annual revenue reaching $2.61 billion and an impressive gross profit margin of 76.32%, Okta demonstrates strong operational efficiency. InvestingPro analysis reveals 13 additional key insights about Okta’s performance and potential.
Despite the positive start, Okta’s second-quarter guidance was only slightly above market expectations, and the cRPO guidance fell short. Furthermore, while reiterating its full-year outlook, management now includes possible macroeconomic challenges in its forecasts, signaling a note of caution in its future performance predictions. Nevertheless, InvestingPro’s Financial Health Score of 2.89 (rated as GOOD) suggests the company maintains a solid financial foundation, with more cash than debt on its balance sheet.
Mizuho’s analysts highlighted Okta’s position as a prominent player in the vital identity management market. They anticipate that the company will continue to benefit from its array of new products, which have already started to make a significant impact. With a market capitalization of $21.97 billion and trading near its 52-week high of $127.57, the company has shown strong momentum. The firm’s evaluation also finds Okta’s valuation appealing, citing a trading multiple of approximately 5.5 times its calendar year 2026 estimated revenue and less than 20 times its forward free cash flow.
In conclusion, while Mizuho has slightly lowered its price target for Okta to $130, the firm maintains a positive outlook on the company’s stock, reiterating an Outperform rating. This stance reflects confidence in Okta’s market leadership and the potential growth from its expanding product portfolio, despite the adjustment for anticipated macroeconomic conditions.
In other recent news, Okta, Inc. reported its first-quarter fiscal year 2026 earnings, which exceeded FactSet consensus estimates in key financial metrics, including revenue and earnings per share. Despite this strong performance, the company’s guidance for future quarters was more cautious, reflecting macroeconomic uncertainties. Wolfe Research adjusted its price target for Okta to $130, maintaining an Outperform rating, while Guggenheim lowered its target to $138 but kept a Buy rating. Cantor Fitzgerald reaffirmed an Overweight rating with a $130 target, citing Okta’s strategic investments and product innovations as potential growth drivers.
Truist Securities maintained a Hold rating with a $100 price target, acknowledging Okta’s progress but highlighting the conservative financial outlook due to economic uncertainties. TD Cowen increased its price target to $115, maintaining a Hold rating, and noted Okta’s market strategy and potential within the cybersecurity sector. Okta’s calculated remaining performance obligations (cRPO) guidance showed growth, but it was below consensus expectations, contributing to mixed analyst reactions. The company’s management has expressed confidence in its financial health, raising guidance for operating income, EPS, and free cash flow for fiscal year 2026. These developments reflect a cautious yet optimistic stance from analysts regarding Okta’s future performance amidst challenging economic conditions.
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