RBC cuts Okta stock price target to $135, maintains Outperform

On Wednesday, RBC Capital Markets revised its price target for Okta, Inc. (NASDAQ:OKTA), a leading identity management company currently valued at $19 billion. Analysts at RBC, led by Matthew Hedberg, adjusted the target to $135.00 from the previous $143.00, while continuing to endorse the stock with an Outperform rating. According to InvestingPro data, the stock has shown remarkable strength with a 64% gain over the past six months.

The adjustment came after Okta reported its quarterly results, which showed a positive 14% growth in calculated remaining performance obligations (cRPO), surpassing the company’s own guidance of 12%. The company maintains impressive gross profit margins of 76.3% and achieved revenue growth of 15.3% in the last twelve months. Hedberg noted that Okta is progressing in line with previous assumptions and is gaining momentum with changes to its go-to-market strategy. InvestingPro analysis reveals 12 additional key insights about Okta’s financial performance.

The company’s guidance for fiscal year 2026 remains unchanged or slightly higher, despite the fact that it now accounts for potential macroeconomic uncertainties. Hedberg also suggested that the lower cRPO guidance for the second quarter of fiscal year 2026 might have been misinterpreted by the market, leading to the decision to maintain the Outperform rating but reduce the price target based on lowered fiscal year 2027 estimates.

Hedberg’s commentary highlighted that, despite the absence of macro pressures, the company’s cautious stance for the future is a reflection of the broader economic environment. "Okta reported a good quarter with +14% cRPO growth vs. +12% guidance. The company appears on track with our prior assumptions and is seeing good traction around GTM changes. While not seeing any macro pressures, FY/26 guidance (unchanged to slightly higher) now reflects macro uncertainties. We also think Q2/26 cRPO, which was guided lower, was mismodeled by the Street. Maintain OP rating, reduce PT to $135 from $143 on lowered FY/27 estimates. We remain constructive on the LT opportunity and the potential for estimates to work higher," Hedberg stated.

The report from RBC Capital Markets reflects a continued belief in Okta’s long-term potential and the possibility for future estimate revisions. Despite the reduced price target, the firm’s stance suggests confidence in Okta’s strategy and market positioning. InvestingPro’s comprehensive analysis indicates a GOOD overall financial health score, supporting the positive outlook. Subscribers can access the full Pro Research Report for detailed insights into Okta’s valuation and growth prospects.

In other recent news, Okta, Inc. reported its first-quarter results, which showed a modest revenue beat, but the company maintained its full-year revenue guidance due to macroeconomic uncertainties. Despite this, Okta experienced a 14% growth in calculated remaining performance obligations (cRPO), indicating a healthy pipeline. BMO Capital adjusted its price target for Okta from $135 to $132, citing a solid quarterly performance but less-than-expected upside in certain financial metrics. Piper Sandler maintained a Neutral rating with a price target of $110, noting the smallest revenue beat in Okta’s history and a cautious outlook due to macroeconomic conditions.

KeyBanc Capital Markets revised its price target from $155 to $140 while maintaining an Overweight rating, highlighting a modest cRPO beat and a strong performance in sectors like the public sector and Auth0. Bernstein kept its Outperform rating and a $132 price target, emphasizing Okta’s delivery on earnings promises despite a conservative guidance approach. Loop Capital reaffirmed its Buy rating and a $140 target, commending Okta’s strategic focus and potential for growth in areas like AI-driven offerings.

These developments reflect a cautious but optimistic stance from analysts, as they weigh Okta’s strong start to the fiscal year against broader economic uncertainties. Okta’s management remains conservative in its projections, aligning with the mixed analyst ratings and price target adjustments. Investors are closely watching how Okta navigates these challenges while maintaining its growth trajectory.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.