Will Okta Stock Continue to Crush the Market Going Forward?



Okta stock 

Okta (OKTA), an enterprise identity management service provider, has generated staggering returns since its IPO in April 2017. Okta stock has risen 128% in the last 12 months. Since the beginning of 2019, the stock has risen 93.7%. Okta has generated a return of 426.0% since its IPO.

Okta stock is trading 0.5% below its 52-week high of $124.13 and 195% above its 52-week low of $41.88.

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First-quarter results

Last week, Okta announced its first-quarter results. The company reported revenues of $125 million—a rise of 50% YoY (year-over-year). The adjusted EPS was -$0.19. Analysts expected Okta to post revenues of $117 million and earnings of -$0.21 in the first quarter.

Subscription revenues accounted for 94.0% of the company’s sales. In the second quarter, Okta expected sales of $130 million—a rise of 37.0% YoY and an EPS of -$0.10. The estimates were above analysts’ sales estimates of $127.54 million and EPS estimates of -$0.14.

Okta’s customer base has risen by almost 5x in the last four years. Customers with an annual contract value of over $100,000 have grown 60.0% annually. Okta’s subscription sales have risen by 10x since 2014.

Although Okta still isn’t profitable, its EPS is estimated to grow 25.0% annually in the next five years. Okta isn’t a cheap stock. The stock is valued at 25x the sales. However, the stock is supported by strong growth metrics. Like other high-growth stocks, Okta seems like a solid long-term bet. Investors need to watch when the stock corrects in excess of 10%–15%.

Above the average estimate

Among the nine analysts tracking Okta, five recommended a “buy,” while four recommended a “hold.” There weren’t any “sell” recommendations for Splunk. Analysts have a 12-month average target price of $116.0, which indicates that Okta stock is trading at a premium of 6.0% to the average estimate.


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