To The Moon

U.S. stock futures fell Sunday, as President Donald Trump offered little reassurance after the S&P 500 $S&P 500(.SPX)$ had its worst week since September, which fell 3.10%. The $DJIA(.DJI)$ fell 2.37%, while the $NASDAQ(.IXIC)$ shed 3.45%.

But $Okta Inc.(OKTA)$ became the best-performing stock, and TigerPicks has a fundamental highlight to help users understand it better.

$Okta Inc.(OKTA)$

Okta, Inc. is a leading provider in the identity and access management sector, offering cloud-based solutions that enable organizations to securely connect people to technology. Its core products and services include identity management, authentication, and access control solutions.

Just when I thought the market was going to give growth and technology stocks another day of reckoning to consider, Okta, Inc. (NASDAQ:OKTA) came to the rescue, showing us that perhaps the doom and gloom that has percolated into the market over the past three weeks could have been overstated.

OKTA’s almost 25% surge in 4th March shouldn't have surprised anyone, since the stock was still considered relatively undervalued before the surge when we incorporated its growth profile (adjusted PEG ratio of 30% below sector median).

Okta Q4 presentation

Three Pivotal Growth Areas

Okta has made significant advances into three pivotal growth areas, as seen in the chart above. Incidentally, It has expanded Okta’s opportunity set, allowing the company to capture underlying demand drivers beyond just access management, although it remains the company's core growth underpinning. Management reported that it delivered “record bookings” in the quarter, corroborating the success of its robust GTM approach, with total contract value surpassing “$1B for the first time.” I think that has set the stage to assure investors that Okta has navigated the competitive headwinds against $Microsoft(MSFT)$ constructively, even though the software giant is known for bundling its solutions to achieve a more competitive TCO against its rivals.

Okta’s CEO Reminds us that the company's identity security solutions are still favored by customers who prefer a neutral provider that helps them avoid getting locked into Microsoft’s proprietary technology stack. As a result, Okta has also made solid progress with $Amazon.com(AMZN)$ Amazon Web Services, underscoring its execution prowess of being a platform-agnostic solution provider.

Furthermore, the proliferation of Generative AI Has intensified the need for enterprises, whether private or public, to accelerate the adoption of more advanced identity solutions as adversaries are increasingly sophisticated in deploying AI against them. Therefore, the impetus for increased adoption of Okta’s best of breed solutions should be sustained not only by winning more deals from current Microsoft customers but also by delivering more value for them with its “unified identity solution” while helping these customers to maintain a platform neutral posture.

OKTA estimates

As seen above, the days of breakneck topline growth for Okta are long over, as the company transitions its strategy from focusing on revenue growth to demonstrating its ability to sustain its business model.

Rsiks

Now, of course, it's not all rosy out there for the Okta, given the recent market upheavals that we have experienced recently. The Trump Administration has leveled up business uncertainty due to the implementation of tariffs and dialed up the risk levels for possible retaliatory tariffs, worsening the trade war between America and its key trading partners.

With that in mind, we should not understate the potential sales cycle risks emanating from these challenges that could result in a more elongated conversion cycle for Okta. Although I believe that identity security solutions should be considered as high value within the C-suite, it seems foolhardy to downplay the impact completely. Yet, the company's revenue growth outlook of just between 9% to 10% for FY2026 suggests that management appears to have already incorporated caution in its guidance.

OKTA price chart (weekly, medium-term)

Is OKTA Stock A Buy, Sell, or Hold?

As a result of the renewed growth opportunities, sticky consumer base, growing backlog, richer balance sheet, and robust capital appreciation prospects, we are reiterating our Buy rating for the OKTA stock.

For now, interested investors may want to observe the price movement for a little longer, since it remains to be seen if the stock is able to sustain the upward momentum and break out from the intermediate resistance levels in the $108s ranges.

Barring which, OKTA is likely to retrace to its prior support ranges of between $100s and $90s, with it implying a -12% downside from current levels.

Patience may be more prudent in the mean time.

Stock Price Forecast:

Here are the target price forecasts for the next 12 months from analysts.

Based on 31 Wall Street analysts offering 12 month price targets for Okta in the last 3 months. The average price target is $115.72 with a high forecast of $135.00 and a low forecast of $75.00. The average price target represents a 2.92% change from the last price of $112.44.

Resource:

https://seekingalpha.com/article/4764969-oktas-breakout-is-here-double-digit-upside-potential-ahead

https://seekingalpha.com/article/4764784-okta-dont-be-blindsided-by-the-market-downgrade

What are your thoughts on $Okta Inc.(OKTA)$ ?

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