I final wrote about Okta (OKTA) in late September when shares had been below $75 and the premier supplier of “identification safety” options was nonetheless affected by the fallout of a breach of buyer knowledge.
I assumed it was a chief alternative so as to add OKTA to any cybersecurity-minded portfolio. Here is what I wrote…
Okta, a $13 billion supplier of identification safety options, is again to the higher realms of the Zacks Rank after EPS estimates turned again north this month.
What’s odd is that the inventory value continues to be within the cellar after their late August earnings report noticed shares drop over 17% on the day of, after which over -25% whole to Sep 10.
The issue is that Wall Avenue continues to be nervous concerning the firm’s enterprise outlook after they needed to pay $60 million to settle an information breach from two years in the past.
Amongst 34 analysts, the typical value goal is above $105 and the low PT is $75.
And enormous establishments had been massive web patrons of OKTA shares in Q2.
It is virtually as if everyone seems to be ready for extra unhealthy information because the inventory sits right here at $76.
So I purchased some. I am clearly on the lookout for the “contrarian upside” to excellent news the inventory just isn’t being discounted for. Here is what I advised my TAZR members yesterday…
TAZR Merchants
Portfolio is shopping for Okta between $74 and $76.
I simply went over the numbers and outlook. Except any person is aware of that one other inside OKTA safety breach goes to drop, or they’re shedding prospects due to the best way they dealt with the final one, I believe the inventory is reasonable relative to all cybersecurity friends.
It is again to a Zacks #1 Rank for a motive and I do not see the concern right here at $13 billion, buying and selling below 5X gross sales.
In the previous few weeks for the reason that firm report, the Zacks consensus EPS estimate for this fiscal 2025 (ends in January) rose 7% from $2.40 to $2.57, representing a 29X P/E in an business loaded with 90X P/Es.
(finish of TAZR Purchase Alert excerpt)
Why I Suppose OKTA Has a Brilliant Future
In addition to that incontrovertible fact that the corporate makes a speciality of “identification safety,” in essence ensuring that the individual licensed for an IT perform is the one being authenticated and monitored, they’re additionally aggressively pursuing the perimeters of recent AI menace vectors.
Yesterday, they rolled out an enlargement of an current service, Auth0, to draw extra company shoppers because the menace panorama evolves. Conventional identification threats, bolstered by AI advances, are enabling low-quality, high-intensity assaults to turn into extra harmful and serving to new, personalised assaults to emerge.
With bots making up practically 50% of all web visitors, builders are challenged with securing their functions on this panorama. Multi-factor authentication (MFA), with possession-based or biometric elements, stays as one of the vital efficient defenses.
Conversely, AI may energy bot detection, with AI serving to Okta block 79% of automated login makes an attempt and lately scale back bot visitors by 90% over a 90 day interval.
(finish of excerpt from my Sep 25 report where you can also read the recent press release about Auth0, their premier identification answer)
OKTA Makes the Grade
Lastly this month, OKTA will get out of the cyber doghouse with their Q3 report and value targets soar over $100. Here is what I advised my TAZR Dealer group final week…
Okta delivered a powerful report final evening and value targets are climbing above $100 — even from the reluctant “impartial” crowd (Jefferies, Susquehanna, Barclays, Piper). However here is abstract from the largest bulls on the Avenue with a $130 PT…
Guggenheim analyst John DiFucci stated strain on new offers and contract renewals is a minimum of partially being offset by gross sales of reports merchandise.
“We proceed to imagine that that is the rationale to personal OKTA, and whereas the volatility round this title undoubtedly has brought on bouts of nausea amongst traders, we imagine the enterprise (and inventory) can construct from this basis,” DiFucci wrote in a be aware final week.
You will get extra element concerning the OKTA numbers on this article…
Okta (OKTA) Reports Q3 Earnings: What Key Metrics Have to Say
Because the report, the place shares gapped up above $90, she’s fallen again to fill the hole from $82 and we at the moment are pushing again above $85. I believe you may nonetheless purchase this premier supplier now earlier than the inevitable attain for brand new highs above $100.
Backside line: Ransomware prices are anticipated to soar at a 30% CAGR from $35B in 2023 to $220B by 2030. You do not have to purchase OKTA, however you higher personal a minimum of 3 cyber corporations for the reason that enterprises needing in depth safety normally make use of 5+ of them to cowl all bases.
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Okta, Inc. (OKTA) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the creator and don’t essentially mirror these of Nasdaq, Inc.
