TD Cowen lifts Okta stock target to $115, maintains Hold rating

On Wednesday, TD Cowen analysts adjusted their outlook on Okta Inc (NASDAQ:OKTA), a leading identity management company, by increasing the price target to $115 from the previous $110 while sustaining a Hold rating on the stock. Currently trading at $125.5, Okta has demonstrated impressive momentum with a 64% surge over the past six months. According to InvestingPro analysis, the stock appears slightly undervalued against its Fair Value estimate. The analysts pointed to Okta’s success in capturing market preference for comprehensive platform solutions as the primary driver behind the revised price target.

The firm emphasized Okta’s continuous development of new products and its effective "land and expand" strategy, which, along with an increasingly efficient go-to-market (GTM) ecosystem, positions the company to capitalize on a total addressable market (TAM) estimated at $80 billion. With impressive gross profit margins of 76.3% and steady revenue growth of 15.3% over the last twelve months, the analysts acknowledged that Okta is well-equipped to meet the rising demand for platform solutions within the cybersecurity sector.

Despite the positive outlook on Okta’s strategic initiatives and market potential, TD Cowen remains cautious due to overarching macroeconomic uncertainties. This sentiment echoes the cautious tone from Okta’s management team regarding the broader economic environment.

The new price target of $115 is based on an enterprise value to fiscal year 2027 estimated revenues multiple of approximately 6.0 times. This valuation reflects a balanced view of Okta’s growth prospects against the backdrop of potential economic challenges.

In conclusion, while TD Cowen recognizes Okta’s strengths in addressing the market’s preference for integrated solutions and its strategic positioning for growth, the firm’s analysts have opted to maintain a Hold rating, suggesting that they advise investors to keep the stock in their portfolios without further accumulation at this time. The price target adjustment to $115 signifies a modest expectation of stock performance improvement while still factoring in the risks posed by the uncertain macroeconomic climate. For deeper insights into Okta’s valuation and growth prospects, investors can access comprehensive analysis and 13 additional ProTips through InvestingPro’s detailed research reports.

In other recent news, Okta, Inc. reported a strong first fiscal quarter, with calculated remaining performance obligations (CRPO) growing by 14% year-over-year, surpassing expectations. Despite this, Okta’s guidance for the second fiscal quarter CRPO was set below consensus, leading several analysts to adjust their price targets. DA Davidson reduced its price target for Okta to $140 while maintaining a Buy rating, citing potential macroeconomic risks. Similarly, Jefferies lowered its target to $130, maintaining a Hold rating due to conservative CRPO guidance.

Evercore ISI raised its price target to $130, keeping an Outperform rating, and noted that Okta’s quarterly performance did not significantly exceed expectations. Meanwhile, Goldman Sachs maintained its Buy rating with a $137 target, highlighting Okta’s solid revenue and EBIT margin performance. BTIG also reiterated a Buy rating with a $142 target, acknowledging Okta’s strong first-quarter results but noting a puzzling decline in CRPO guidance for the second quarter.

Across these analyses, Okta’s unchanged fiscal year 2026 revenue guidance of 9-10% growth reflects a cautious approach amid macroeconomic uncertainties. Despite the mixed reactions, analysts generally remain optimistic about Okta’s long-term potential, with some firms suggesting that any pullback in stock price might present an opportunity for investors.

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