Okta, Inc. (OKTA) delivered better-than-expected financial results for the second quarter, ending the period on a high note. The company reported earnings of 72 cents per share, surpassing analyst estimates of 61 cents by a significant margin of 18.03%. Revenue also exceeded expectations, reaching $646 million, a 2.06% beat over the consensus estimate and a 16.19% increase year-over-year.
Okta’s CEO and co-founder, Todd McKinnon, highlighted the company’s focus on innovation and expansion within its Workforce Identity Cloud and Customer Identity Cloud offerings, positioning Okta as a leader in identity security. Looking ahead, Okta expects continued growth. The company projects third-quarter earnings between 57 and 58 cents per share, surpassing the estimated 55 cents, with revenue anticipated to fall between $648 million and $650 million, exceeding the estimated $639.13 million. For fiscal year 2025, Okta forecasts earnings between $2.58 and $2.63 per share, exceeding the $2.42 estimate, with revenue projected to be between $2.555 billion and $2.565 billion, surpassing the estimated $2.54 billion.
Despite these positive projections, Okta’s stock price dipped by 0.5% to close at $96.54 on Wednesday. The market’s reaction reflects a mixed sentiment among analysts following the earnings announcement. Some analysts, such as Baird’s Shrenik Kothari, maintained an Outperform rating on Okta but lowered their price target from $108 to $105. Conversely, B of A Securities analyst Madeline Brooks downgraded Okta from Buy to Underperform, reducing the price target from $135 to $75. Other analysts, including Wells Fargo’s Andrew Nowinski, maintained an Equal-Weight rating but lowered the price target from $100 to $90. UBS analyst Roger Boyd held onto a Buy rating while adjusting the price target from $120 to $108. Scotiabank analyst Patrick Colville maintained a Sector Perform rating and lowered the price target from $104 to $92.
The varying analyst perspectives highlight the complexity of assessing Okta’s future performance. While the company’s strong financial results and positive outlook are promising, some analysts remain cautious, suggesting that investors carefully consider these factors before making investment decisions.
