Okta (NasdaqGS:OKTA) - Share price, News & Analysis

OKTA fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	0/6
Financial Health	5/6
Dividends	0/6

OKTA Stock Overview

Okta, Inc. provides identity solutions for enterprises, small and medium-sized businesses, universities, non-profits, and government agencies in the United States and internationally.

Rewards

Trading at 82.1% below our estimate of its fair value

Revenue is forecast to grow 26.85% per year

Risk Analysis

Earnings are forecast to decline by an average of 6.6% per year for the next 3 years

Currently unprofitable and not forecast to become profitable over the next 3 years

Shareholders have been diluted in the past year

Okta Competitors

Apple

NasdaqGS:AAPL

US$2.3t

Microsoft

NasdaqGS:MSFT

US$1.9t

Alphabet

NasdaqGS:GOOGL

US$1.5t

Meta Platforms

NasdaqGS:FB

US$520.3b

Price History & Performance

Summary of all time highs, changes and price drops for Okta
Historical stock prices
Current Share Price	US$83.03
52 Week High	US$276.30
52 Week Low	US$77.16
Beta	1.14
1 Month Change	-44.29%
3 Month Change	-49.58%
1 Year Change	-64.52%
3 Year Change	-23.11%
5 Year Change	231.33%
Change since IPO	253.17%

Recent News & Updates

Apr 29

Okta: Still Expensive, But Approaching A Buy Point

Shares of Okta have slid more than 40% this year, driven primarily by the valuation reset in growth stocks. Organic growth has also slowed somewhat while Okta's profitability metrics are also slackening. A recent security breach has also shaken investors' confidence in the stock and may also impact sales momentum. Trading at ~11x forward revenue, Okta is cheaper than it's ever been but is not yet at comfortable buying levels.

Apr 13

Health Check: How Prudently Does Okta (NASDAQ:OKTA) Use Debt?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Apr 04

Okta: Credibility Has Been Smashed

Okta shocked investors and customers by delaying a response to a Lapsus$ hack by two months. We believe that OKTA stock could remain in the penalty box in the near term. We discuss why investors should avoid OKTA stock for now.

Shareholder Returns

	OKTA	US IT	US Market
7D	-5.3%	2.4%	0.1%
1Y	-64.5%	-27.6%	-12.7%

Return vs Industry: OKTA underperformed the US IT industry which returned -27.4% over the past year.

Return vs Market: OKTA underperformed the US Market which returned -11.5% over the past year.

Price Volatility

Is OKTA's price volatile compared to industry and market?
OKTA volatility
OKTA Average Weekly Movement	12.2%
IT Industry Average Movement	10.3%
Market Average Movement	8.0%
10% most volatile stocks in US Market	17.0%
10% least volatile stocks in US Market	3.0%

Stable Share Price: OKTA is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 12% a week.

Volatility Over Time: OKTA's weekly volatility (12%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2009	5,030	Todd McKinnon	https://www.okta.com

Okta, Inc. provides identity solutions for enterprises, small and medium-sized businesses, universities, non-profits, and government agencies in the United States and internationally. The company offers Okta Identity Cloud, a platform that offers a suite of products and services, such as Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization; Single Sign-On that enables users to access applications in the cloud or on-premise from various devices; Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, Web applications, and data; Lifecycle Management that enables IT organizations or developers to manage a user's identity throughout its lifecycle; API Access Management that enables organizations to secure APIs; Access Gateway that enables organizations to extend the Okta Identity Cloud from the cloud to their existing on-premise applications; and Advanced Server Access to secure cloud infrastructure. It also provides Auth0 products, including Universal Login that allows customers to provide login experience across different applications and devices; Attack Protection, a suite of security capabilities that protect from malicious traffics; Adaptive Multi-Factor Authentication that minimizes friction to end users; Passwordless authentication enables users to login without a password and supports in various login methods; Machine to Machine provides standards-based authentication and authorization; private Cloud that allows customers to run a dedicated cloud instance of Auth0; and Organizations that enables customers to independent configurations, login experiences, and security options.

Okta Fundamentals Summary

How do Okta's earnings and revenue compare to its market cap?
OKTA fundamental statistics
Market Cap	US$12.42b
Earnings (TTM)	-US$848.41m
Revenue (TTM)	US$1.30b

10.1x

P/S Ratio

-15.4x

P/E Ratio

Is OKTA overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
OKTA income statement (TTM)
Revenue	US$1.30b
Cost of Revenue	US$394.52m
Gross Profit	US$905.69m
Other Expenses	US$1.75b
Earnings	-US$848.41m

Last Reported Earnings

Jan 31, 2022

Next Earnings Date

Jun 02, 2022

Earnings per share (EPS)	-5.38
Gross Margin	69.66%
Net Profit Margin	-65.25%
Debt/Equity Ratio	30.9%

How did OKTA perform over the long term?

See historical performance and comparison

Valuation

Is Okta undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: OKTA ($83.03) is trading below our estimate of fair value ($463)

Significantly Below Fair Value: OKTA is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: OKTA is unprofitable, so we can't compare its PE Ratio to the US IT industry average.

PE vs Market: OKTA is unprofitable, so we can't compare its PE Ratio to the US market.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate OKTA's PEG Ratio to determine if it is good value.

Price to Book Ratio

PB vs Industry: OKTA is good value based on its PB Ratio (2.2x) compared to the US IT industry average (3.1x).

Future Growth

How is Okta forecast to perform in the next 1 to 3 years based on estimates from 28 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-6.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: OKTA is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: OKTA is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: OKTA is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: OKTA's revenue (26.8% per year) is forecast to grow faster than the US market (7.8% per year).

High Growth Revenue: OKTA's revenue (26.8% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: OKTA's Return on Equity is forecast to be low in 3 years time (1.4%).

Past Performance

How has Okta performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-45.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: OKTA is currently unprofitable.

Growing Profit Margin: OKTA is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: OKTA is unprofitable, and losses have increased over the past 5 years at a rate of 45.2% per year.

Accelerating Growth: Unable to compare OKTA's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: OKTA is unprofitable, making it difficult to compare its past year earnings growth to the IT industry (21.4%).

Return on Equity

High ROE: OKTA has a negative Return on Equity (-14.33%), as it is currently unprofitable.

Financial Health

How is Okta's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: OKTA's short term assets ($3.0B) exceed its short term liabilities ($1.2B).

Long Term Liabilities: OKTA's short term assets ($3.0B) exceed its long term liabilities ($2.0B).

Debt to Equity History and Analysis

Debt Level: OKTA has more cash than its total debt.

Reducing Debt: Insufficient data to determine if OKTA's debt to equity ratio has reduced over the past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable OKTA has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: OKTA is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 65.6% per year.

Dividend

What is Okta current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate OKTA's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate OKTA's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if OKTA's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if OKTA's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as OKTA has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average management tenure

CEO

Todd McKinnon (49 yo)

14.33yrs

Tenure

US$31,820,477

Compensation

Mr. Todd McKinnon serves as Chief Executive Officer of Okta at Auth0, Inc. since 2021. He co-founded Okta, Inc. in 2008 and has been its Chief Executive Officer since January 2009. From October 2003 to Feb...

CEO Compensation Analysis

Compensation vs Market: Todd's total compensation ($USD31.82M) is above average for companies of similar size in the US market ($USD13.26M).

Compensation vs Earnings: Todd's compensation has increased whilst the company is unprofitable.

Leadership Team

Experienced Management: OKTA's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.

Board Members

Experienced Board: OKTA's board of directors are considered experienced (6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.1%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/19 00:00
End of Day Share Price	2022/05/19 00:00
Earnings	2022/01/31
Annual Earnings	2022/01/31