Okta Stock Could Have More Upside After Its 28% Rally, Analysts Say

Okta's stock has surged 28% over the past five days and nearly 93% year-to-date, driven by strong financial results and analysts' optimism about its long-term potential. The company's fiscal second-quarter report delivered revenue of $805 million, up 11% year-over-year, with subscription revenue increasing 12% to $793 million. Adjusted earnings per share (EPS) came in at $1.05, beating estimates.

The company's customer base expanded by over 20% to more than 600 customers, largely due to its core identity business. However, newer products are also expanding rapidly, accounting for 30% of total bookings in Q2. Management expects revenue to grow 10% to 11% in fiscal 2027, with adjusted EPS at $3.90 to $3.94, a 12% increase.

Despite its impressive financials, Okta's stock is trading at a valuation more typical of a high-growth company, suggesting investors anticipate continued growth from AI security and expanded product offerings.