Okta's Earnings: A Preview

Okta OKTA unveils its next round of earnings this Wednesday, May 26. Get prepared with Benzinga's ultimate preview for Okta's Q1 earnings.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Based on management's projections, Okta analysts modeled for a loss of $0.2 per share on sales of $238.31 million. In the same quarter last year, Okta posted EPS of $0.07 on sales of $182.86 million.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to report earnings in line when it publishes results Wednesday, quarterly profit would be down 185.71%. Revenue would be up 30.32% on a year-over-year basis. Here is how the company's reported EPS has compared to analyst estimates in the past:

Stock Performance

Shares of Okta were trading at $242.56 as of May 24. Over the last 52-week period, shares are up 33.88%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Okta is scheduled to hold the call at 17:00:00 ET and can be accessed here.