Okta Stock Just Hit a New 3-Year High on Earnings Rally. How You Should Play the Surge.
Okta's (OKTA) stock surged to a new three-year high following impressive financial results for Q2 and an upward revision of full-year guidance. RBC Capital Markets raised its price target to $195, suggesting a potential 15% increase from current levels. The positive earnings release led to a bullish call from senior analyst Matthew Hedberg, who highlighted strong growth in remaining performance obligations (cRPOs) and robust demand for Okta's security products in the AI era.
With bookings up 14% year-over-year to $2.56 billion, Okta's revenue for the year is expected to reach approximately $3.22 billion, with an adjusted basis of $3.90 per share earnings. The company's recent offerings, such as Okta Identity Governance (OIG) and Okta Privileged Access (OPA), are contributing to enterprise cross-sells and increasing Average Contract Values by around 40%.
Despite the stock's stretched forward P/E multiple of around 75x, Hedberg recommends buying OKTA shares following the Q2 release, with his peers at Citizens, D.A. Davidson, Cantor Fitzgerald, and Citigroup also increasing their price targets. The consensus rating on Okta is Strong Buy.
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