Okta rose about 5 percent today, its best session in weeks, and is now trading at a new high for the year. We think this is mostly the whole market moving higher, combined with some extra momentum as the company's quarterly results approach later this month.
Our view
The business is doing well and turning a real profit for the first time, but the stock price has risen fast and doesn't leave much room for error. If you already own it, there's nothing to do here but sit tight.
The upcoming report will cover the three-month period that ended in July. This will be the first major check on whether the company is meeting its goal of keeping cash flow margins at or above 25 percent while growth begins to slow.
Permiso uses behavioral analytics to spot risks in how people and automated software programs use their digital credentials. This helps the company expand beyond just letting people into apps and into actively monitoring for suspicious activity once they are inside.
By adding these tools, the company makes its platform more useful for large businesses that are increasingly worried about automated AI attacks. It also gives the sales team a new product to offer existing customers, which is a key part of the plan to grow profits even as new customer sign-ups slow down.
Analyst price updatePositive
Jul 20
Wells Fargo raises target to $150
The 50 percent increase in the target price reflects a much more optimistic view of the stock's value. However, the neutral rating suggests the firm thinks the shares are now fairly priced after their recent run higher.
This target is well above the current price and the average analyst estimate of $127. It signals a belief that the company's shift toward higher profitability is not yet fully reflected in the stock price.
This is one of the highest targets on the stock and sits significantly above the average analyst view. It suggests high confidence that the company can continue to win large enterprise deals even as it faces tougher competition from Microsoft.
Analysts have steadily raised their price targets for Okta throughout the summer following a flurry of positive research updates. While 37 of 51 analysts rate the stock a buy, the average target of $127 is 18% below today's price.
Average target$127.35-18%vs $154.95 today
TodayAvg price
Low $60High $175
Strong Buy51 analysts
2Bearish
12Neutral
37Bullish
FirmRatingPrice TargetDate
Wells Fargo
Equal Weight
$100→$150
7/20/2026
Capital One Financial
Overweight
$171
7/16/2026
KeyBanc
Overweight
$175
7/10/2026
Scotiabank
Sector Outperform
$165
7/6/2026
Scotiabank
Sector Outperform
$135
6/29/2026
BTIG
Buy
$119→$136
6/25/2026
KeyBanc
Overweight
$120→$130
6/25/2026
Needham
Buy
$120→$140
6/24/2026
UBS
Buy
$115→$150
6/9/2026
Mizuho Securities
Neutral
$125
6/2/2026
Goldman Sachs
—
$110→$126
5/29/2026
Macquarie
Outperform
$100→$120
5/29/2026
Okta earnings
Management has a perfect record of clearing the bars they set for themselves, beating expectations for eight straight quarters. They consistently deliver more profit than they promise.
Earnings history
EstimateBeatMiss
Okta past earnings results
Expected
Actual
Surprise
EPS
$0.85
$0.91
+6.7%
Revenue
$752M
$765M
+1.7%
Key highlights
Strong cash generation: Free cash flow, the cash left over after paying for operations and equipment, grew to $271 million from $238 million a year ago. This represents a healthy 35% of total revenue, which gives the company more flexibility to buy back its own shares and pay down debt.
Large enterprise momentum: Backlog expected to be turned into revenue over the next year grew 12% to $2.499 billion, which met the company's internal targets. Management credited this growth to better sales productivity and higher demand from large organizations for the company's new governance products.
Revenue mix shift: Total revenue rose 11% to $765 million, but the company is intentionally slowing down its professional services work to let partners handle those tasks instead. This move will create a 1% headwind to total revenue growth this year as the company focuses on its more profitable subscription business.
Customer retention holding steady: The net retention rate, which measures how much more existing customers spend each year, stayed at 111%. While this is above the 110% target we look for, it shows that growth is currently coming more from steady renewals than from massive expansions within the current customer base.
Raised full year outlook: The company increased its full year revenue forecast to a range of $3.185 billion to $3.205 billion, up from its previous estimate. It also expects to finish the year with a free cash flow margin between 27% and 28%, showing that the business is becoming more efficient as it grows.
Our take: This was a strong start to the year that proved the company can grow its profits and cash flow even while its sales growth settles into a slower pace. The jump in free cash flow to 35% of revenue is the standout figure here. It confirms the business is becoming much more disciplined, which strengthens the case for long term owners.
Okta’s next earnings date
Q2 2027
AUG
26
Expectation
EPS
$0.96
Revenue
$793M
Metrics we are tracking
Metric
Expectations
Status
cRPO Growth
Staying above 12% year-over-year
12% YoY in Q1 FY2027
FCF Margin
Staying at or above 25% of total revenue
35% in Q1 FY2027
Customer Retention (NRR)
Maintaining a net retention rate above 110%
111% in Q1 FY2027
Enterprise Customer Growth
Adding more than 100 new $100k+ customers per quarter
