Okta Rockets Higher On Strong Q2 Print: Analysts Cheer 'Renewed Focus On Efficient Growth'

Shares of Okta Inc OKTA were flying higher on Thursday after the company reported its fiscal second-quarter earnings.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

BMO Capital Markets On Okta

Analyst Keith Bachman maintained a Market Perform rating, while raising the price target from $85 to $90.

Okta’s quarterly results were ahead of the low guidance and Street estimates, Bachman said in a note.

Although Okta’s growth decelerated in the second quarter, this was milder than in previous quarters, the analyst stated. “In addition, the margin expansion continued, with FCF margins expected to achieve mid-teens in FY24,” he added.

Oppenheimer On Okta

Analyst Ittai Kidron reiterated an Outperform rating and price target of $110.
Okta’s quarterly results highlighting “improved sales execution, high gross retention, and strong upsell/cross-sell activity with existing customers despite a challenging macro backdrop,” Kidron wrote.

“We believe Okta has overcome the issues with integrating Auth0 (29% AVC growth for customer identity; vs. 35% in F4Q22), and is now better positioned to cross-sell a broader product portfolio,” he added.

RBC Capital Markets On Okta

Analyst Matthew Hedberg reaffirmed an Outperform rating and price target of $112.

“In a nice bounce-back, Okta reported a strong quarter relative to expectations,” Hedberg wrote. “Additionally, management increased the FY/24 guide though the Q3/24 cRPO guide was again lower as we feel upside remains likely,” he added.

The company executed well even against a patchy macro environment “but noted stabilizing trends,” the analyst stated. Okta continued to deliver solid margin expansion, he further mentioned.

Check out other analyst stock ratings.

Needham On Okta

Analyst Alex Henderson maintained a Buy rating and price target of $100.
“Okta produced a solid Beat and Raise print driven primarily by improving execution,” Henderson wrote in a note.

“The challenges around the integration of Auth0 are behind them and the go-to-market churn is now shifting to improving sales productivity,” he added.

Raymond James On Okta

Analyst Adam Tindle reiterated a Market Perform rating on the stock.

Okta achieve good margin upside in the quarter and made gains with large customers, Tindle said.

“While FY24 outlook was raised beyond the 2Q upside, cRPO growth is the key forward growth metric and is expected to decelerate by 500 bp q/q,” the analyst wrote. “This metric is likely to slow down for eight consecutive quarters and is tracking to low double digit growth exiting FY24,” he added.

William Blair On Okta

Analyst Jonathan Ho reaffirmed an Outperform rating.

“We attribute the strong performance to the company’s renewed focus on efficient growth and productivity gains from its salesforce realignment efforts that are starting to show through,” Ho said.

“While the macroenvironment has stabilized, it remains challenging,” he added.

OKTA Price Action: Shares of Okta were up 12.21% to $82.56 at the time of publication Thursday.

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