Okta's Growth in Identity Security Drives Bullish Outlook, Analyst Sees Upside

WestPark Capital analyst Casey Ryan reiterated Okta Inc OKTA with a Buy and a $140 price target.

Okta will report fourth-quarter and fiscal 2025 results on March 3 after the market close.

Street estimates call for revenues of $668 million and EPS of $0.73 compared to WestPark estimates for $670 million and $0.71.

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Key metrics include total remaining performance obligations (Total RPO), which grew 19% in the third quarter, up from 14% in the first quarter and 16% in the second quarter.

Strong RPO trends are key to impacting ultimate top-line performance in fiscal 2026 and beyond.

The key question on almost all conference calls concerns the impact of government policy on spending on key products like identity software.

Ryan does not expect tangible impacts from this, but Okta’s commentary and expectations for this segment will be of great interest.

Okta trades at a discount to its peer group’s EV/Sales multiple, 5.0 times Ryan’s calendar 2025 revenues estimate, compared to the peer group’s EV/Sales multiple of 11.8 times.

Okta is now executing its signaled expansions into Identity Governance and Administration (IGA) and Privileged Access Management (PAM) markets with its product line and market opportunities within these new product areas, suggesting OKta can drive sustained long-term growth.

Ryan noted that Okta shares deserve to trade in line with the peer group at roughly 10 times EV/Sales on fiscal 2025 revenues, driving his $140 price target.

Price Action: OKTA stock is up 0.54% at $89.68 at last check Friday.

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