Okta Ran Into Trouble With An M&A Deal But 'Righted These Problems,' Analyst Says

Shares of Okta Inc OKTA started Thursday trading on a positive note, maintaining its uptrend year to date.

Management’s revenue growth guidance of 16%-17% appears conservative, according to Needham.

The Okta Analyst: Alex Henderson upgraded the rating for Okta from Hold to Buy, while establishing a price target of $90.

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The Okta Thesis: Although the San Francisco-based company ran into trouble with the Auth0 acquisition integration and disruptions to the Enterprise Sales process, it seems to have “righted these problems,” Henderson said in the upgrade note.

"We think the growth bar set at 16%-17% in FY24/CY23 is easily beatable as it was set before evidence of the fixes kicked in," the analyst wrote. "The Customer business alone, at ~45% of Revenue and growing 30%-35%+, should be able to drive company-wide Revenue to meet the CY23/FY24 guidance, we believe."

Henderson further wrote that the Workforce business could add “solidly” to growth with margin expansion.

OKTA Price Action: Shares of Okta had risen by 4.64% to $79.68 at the time of publication Thursday.

Next: Okta Shows Clear Progress, But This Analyst Remains On The Sidelines Citing No Clear Catalyst For Improved Valuation