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Okta (OKTA) Surges 7.2%: Is This an Indication of Further Gains?

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Okta (OKTA - Free Report) shares soared 7.2% in the last trading session to close at $238.48. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.9% gain over the past four weeks.

The upswing in share price came as the company raised its expectation for annual revenues to grow by 30% in each of the next three years. This can be attributed to the expansion of its service offerings to two news product classes, namely, privileged access management and identity governance and administration (IGA) which are expected to expand the size of Okta’s potential markets to about $80 billion.

Price and Consensus

Price Consensus Chart for OKTA

This cloud identity management company is expected to post quarterly loss of $0.20 per share in its upcoming report, which represents a year-over-year change of -185.7%. Revenues are expected to be $238.58 million, up 30.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Okta, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on OKTA going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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