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Trade Desk, Okta, Microsoft and Moderna highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – September 16, 2021 – Zacks Equity Research Shares of The Trade Desk, Inc. (TTD - Free Report) as the Bull of the Day, Okta, Inc. (OKTA - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Microsoft Corporation (MSFT - Free Report) and Moderna, Inc. (MRNA - Free Report) .
The Trade Desk is the $34 billion leader in digital advertising, as an innovative demand-side platform (DSP) outside the "walled gardens" of Google and Facebook.
I call them the "CME of Advertising" because of their programmatic platform which enables all ad buyers to set up algorithms based on customer data and targeting -- and then have the program bid for ad space, in real-time, across the web and connected-TV.
These ad buying programs can then run automatically and continuously according to the buyer's budget, geographies and time zones -- just like the modern hedge fund "algos" that scour the financial markets for trading opportunities.
This eliminates time-consuming "insertion orders" for ad buying as the platform serves the ad buyer with instant access to consumer data and markets on endless internet real estate and Connected-TV (C-TV) platforms like Roku.
Dominant Tech Platforms Don't Come Cheap
After another strong beat-and-raise quarterly report on August 9, TTD shares reached for their old highs above $90 but have fallen into a downtrend on the overall pullback in software valuations.
TTD trades for just over 22 times next year's projected sales of $1.5 billion. That's rich, but that topline is growing at 40% this year, and the consensus of 30% growth next year I expect will rise.
Plus, since TTD has been consistently profitable with its "exchange model," when you add the revenue and the profit profiles together, you get a company trading solidly in the upper realms of the "Rule of 40" hurdle for software investors.
To learn more about that metric, see my most recent Cook's Kitchen dive here...
Since the recent TTD report changed the minds of a lot of Wall Street analysts, I'd also bet good money that the top institutional holder who bought 11 million shares in Q2, Scottish investment fund Baillie Gifford, is probably buying more every chance they get under $70.
Those Scottish Warlords of Investing are all about disruptive technology platforms with 10 to 20-year growth trajectories.
Quarter Details and Outlook
The Trade Desk delivered EPS of $0.18, beating the Zacks Consensus Estimate of $0.13 per share. This compares to EPS of $0.09 in the year-ago quarter. These figures are adjusted for non-recurring items.
This beat represented an earnings surprise of 38.46%. Last quarter, TTD "wowed the crowd" even more with a positive surprise of 75%.
TTD posted revenues of $280 million for Q2, surpassing the Zacks Consensus Estimate by 7%, and clobbering the year-ago revenues of $139.36 million by over 100%.
In company guidance, The Trade Desk sees Q3 revenue of at least $282 million, vs. the consensus of about $275M. TTD also forecast Q3 adjusted EBITDA of $100M.
In addition to highlighting the launch of their new service Solimar, on the conference call TTD also revealed that in the second half of the year, Walmart will launch a new DSP, which integrates Walmart shopper data and is built on Trade Desk's platform.
Solimar > Covid
Maybe some of the pessimism around TTD shares at $90 after the report was due to company comments like this...
"Our business has been impacted by the COVID-19 pandemic that has significantly impacted advertiser demand. Like many companies that are ad-funded, we are facing a period of higher uncertainty in our business outlook. We expect our business performance could be impacted by issues beyond our control, such as changing economic conditions or additional shelter-in-place orders that may or may not occur."
To me that sounds like every business on the planet right now. And yet The Trade Desk is a revolutionary platform going into a global advertising market that is headed toward $1 trillion in transactions.
Imagine being a clean, fast, data-driven toll booth for that TAM (total addressable market). That's why I call them the "CME of Advertising."
And Solimar is just the ticket for launch. Here's how they describe the platform's features for the DSP market...
Brands and marketers are pioneering a new marketing normal, one that requires an innovative approach to data-driven advertising. That’s why we created Solimar. Our new platform completely reimagines the media buying experience, putting your business objectives front and center, unleashing the full power of your first-party data, and giving you access to a powerful marketplace of measurement partners.
And here was CEO Jeff Green talking about the exciting opportunities available as they give marketers more useful data -- and let's them securely bring their own data -- without violating privacy concerns of consumers...
"Our growth speaks to The Trade Desk’s position as the default DSP for the open internet. Nowhere is this more apparent than in Connected TV, as more premium streaming inventory becomes available to meet growing marketer demand for data-driven TV advertising. From a customer perspective, more of the world’s leading brands, and their agencies, joined our platform, or expanded their relationship with us.
"We also recently launched our new trading platform, Solimar, the biggest product launch in our company’s history. Solimar allows advertisers to take advantage of many opportunities in front of them today, with features such as simple and secure onboarding of first-party data; the industry’s most advanced cross-channel measurement marketplace; and advanced, multi-level goal-setting which allows our KOA AI technology to optimize campaigns for the trader.”
Analysts Boost Estimates and Price Targets
After the report and conference call, analysts moved their EPS targets much higher. This year's consensus jumped 22% from $0.64 to $0.78, representing steady 13% EPS growth.
And here were some select comments and big price target (PT) bumps...
Truist analyst Youssef Squali raised his PT on The Trade Desk to $92 from $62, noting the company posted solid Q2 results and Q3 guidance and "while visibility beyond next quarter is clouded by the re-opening and variability," the first half performance gives him confidence in the company's ability to exceed Street expectations.
With 2021-2026 estimated sales CAGR of about 30%, valuation on Trade Desk looks compelling to the Truist analyst.
KeyBanc analyst Justin Patterson raised his PT on The Trade Desk to $90 from $74, as the analyst believes TTD continues to benefit from the advertising recovery, with particular strength in C-TV and international. Coupled with the new Solimar update and efforts to improve data onboarding and efficacy, Patterson thinks high 20% to 30% y-o-y revenue growth is very achievable over the medium-term.
DA Davidson analyst Tom White raised the firm's PT on TTD to $95 from $65, citing the company's Q2 results and Q3 guidance that handily beat estimates. White believes The Trade Desk's long-term global opportunity in digital programming is as compelling as ever and that C-TV and online video remain the key drivers of Trade Desk's growth.
White added that the decision by Google to delay the deprecation of third-party cookies in Chrome provides the company with even more time to prepare for this change.
Oppenheimer analyst Jason Helfstein raised his PT on The Trade Desk to $95 from $85, arguing that Q2 results reflect TTD's ability to capitalize on linear TV budget shifting to C-TV. Helfstein adds that strong international growth for Trade Desk continues, with CTV revenue rising over 10-times in AMEA.
Susquehanna analyst Shyam Patil raised his PT on The Trade Desk to $105 from $100, calling it a "must own" stock as he continues to view the company as a multi-year growth story with several key growth drivers in play, notably CTV -- especially internationally -- and shopper marketing via Solimar.
Google's Cookie Twilight Won't Upset This New Monster
And here was one stick in the mud who reluctantly raised estimates...
Citi analyst Nicholas Jones raised the firm's PT on The Trade Desk to $85 from $60, but kept a Neutral rating on the shares. The analyst moved estimates higher on the better Q2 results and outlook than he originally expected. Jones views Trade Desk as a "dominant and best-in-class" ad-tech player, but continues to see risk associated with technology disruption and privacy regulation.
Obviously, he's talking about Google's plan to phase out 3rd-party cookies. But TTD is already planning to innovate past the need for Google's cookies, especially as they want to be agnostic about platforms and hyper-vigilant with consumer data privacy issues.
In the end, I'm betting on TTD to figure out the best ways to track data on consumer shopping and buying behavior without violating their privacy.
Disclosure: I own shares of TTD for the Zacks TAZR Trader portfolio.
Okta is the $40 billion cybersecurity provider of cutting-edge identity solutions for corporations.
The company's products consist of Okta IT for Developers and include Single Sign-On, Mobility Management, and Adaptive Multi-Factor Authentication.
Okta reported second-quarter fiscal 2022 adjusted loss of 11 cents per share, 68% narrower than the Zacks Consensus Estimate of a loss of 35 cents. The company had reported earnings of 7 cents per share in the year-ago quarter.
Total revenues surged 57.4% year over year to $315.5 million and surpassed the consensus mark by 6.5%. The upside can be attributed to higher subscription revenues.
Subscription revenues (96.1% of total revenues) surged 59% year over year to $303.1 million. Professional services and other revenues (3.9% of total revenues) increased 26.9% year over year to $12.4 million.
EPS Estimates Try to Dig Out
Before we look at the numbers in detail, let's understand why Okta is in the cellar of the Zacks Rank now, but may soon climb out.
The good news is that after the recent quarterly report, Wall Street analysts raised EPS estimates for OKTA by a nice margin from a loss of $1.12 this year to a loss of just 75 cents.
The bad news is that this still represents another big loss year for OKTA and next year doesn't improve that much either. The company is still heavily investing in their business.
If the upward EPS estimate revisions from analysts continue, then OKTA could rise from the temporary purgatory of the Zacks Rank lower realms.
The Valuation Question
More good news is that the price/sales valuation of OKTA -- at a steep 23 times next year's consensus of $1.75 billion -- is smaller than the sales growth rate of 50% this year and 39% next year.
That's what you want to see for these high-flying software stocks, that might eat the world.
To learn more about this math, see my most recent Cook's Kitchen dive here...
Globally, revenues from the United States (79.3% of total revenues) in the fiscal second quarter were $250.1 million, up 48.7% year over year. International revenues (20.7% of total revenues) soared 103% year over year to $65.4 million.
Total calculated billings were $362.4 million, up 82.9% year over year. The uptick was driven by new and existing commercial as well as enterprise customers, and increased bookings.
The dollar-based retention rate in the trailing 12 months was 124%, which is a solid showing that basically measures "how much of my existing customers were adding services."
Remaining Performance Obligations (“RPO”) totaled $2.24 billion, up 57% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.1 billion, up 60% year over year.
OKTA Customer Details
Okta added an impressive 2,400 new customers in the reported quarter, taking the total customer count to 13,050, up 46% year over year.
Okta Identity Cloud’s capability to consolidate and easily integrate existing applications without compromising security or stability is attracting customers. And Okta products’ ability to automate the process, secure data, and reduce costs is clearly attracting new customers.
OKTA Operating Details
Non-GAAP total gross profit surged 52.8% year over year to $241.5 million. Gross margin contracted 230 basis points (bps) to 76.5%.
Non-GAAP research and development expenses increased 76.6% year over year to $68.7 million. Additionally, non-GAAP sales and marketing, and general and administrative expenses increased 71.9% and 85.2% year over year to $146.4 million and $50.9 million, respectively.
Non-GAAP total operating expenses increased 75.5% year over year to $266 million.
Non-GAAP operating loss was $24.5 million against operating income of $6.5 million in the year-ago quarter.
OKTA Guidance
For third-quarter fiscal 2022, Okta expects revenues in the range of $325-$327 million, which indicates year-over-year growth of 50%.
Non-GAAP operating loss is expected in the range of $34-$35 million while non-GAAP net loss is anticipated in the band of 24-25 cents per share.
For fiscal 2022, revenues are expected in the range of $1.243-$1.250 billion, indicating year-over-year growth between 49% and 50%.
Non-GAAP operating loss is expected in the range of $114-$119 million and non-GAAP net loss is anticipated between 74 and 75 cents per share.
Bottom line on OKTA: This innovative company could continue to compound annual growth in the 30-40% range with their unique security/identity solutions. Be on the watch for more EPS revisions higher and a quicker turn to profitability.
The Zacks Rank will let you know.
Additional content:
Green Across the Board at Market Close
We bounced back across the board on the market indexes Wednesday, following a sullen day of mostly selling off stocks Tuesday. Not only that, but each index reached a healthy notch upward: the Dow was up 236 points, or +0.68% — its second up day in the past three — while the Nasdaq brought in +0.82% gains. The S&P 500 was marginally better than that, +0.85%. The Russell 2000, which had been lagging the bigger indexes, was +1.11% yesterday.
Aside from the economic metrics Wednesday morning — lighter Import Prices and hotter-than-expected Empire State data — there wasn’t much by way of a catalyst for market activity. It would appear some buy-levels of valuation had begun to pop onto the screen after the first half of September saw some stock shedding, but it doesn’t look like a -5% hit to the market on the way. At least it doesn’t look like that right now. Shares closed yesterday near session highs.
All four market indexes are off the recent highs we saw last Thursday, so even today’s healthy trading environment wasn’t enough to correct for the selling in one fell swoop. For the day, only the Utilities sector — which led markets in yesterday’s down-trading — failed to close in the green. The other 10 S&P segments all found their way to positive territory.
We learned about a Microsoft share buyback program in the works, to the tune of $60 billion. The company will be raising its dividend yield 11%. Shares of Microsoft gained about +1.7% on the day, following an impressive year-to-date gain of +37%. Once the stock advanced higher, it had mostly plateaued until a final small burst toward the end of the regular trading session.
Moderna released data Wednesday, illustrating that a year after vaccine recipients received their first of two doses, the efficacy appears to give less protection. The study compared results versus subjects who were given placebo, who subsequently received their vaccine at a later date. A measurable number of breakthrough cases occurred with those subjects who were given the vaccine earlier compared with those who were vaccinated later.
Thursday we get more important economic data, including Initial and Continuing Jobless Claims, Retail Sales and a new Philly Fed survey. This morning we saw the Empire State index roar ahead of expectations; perhaps Philly Fed will follow suit? In any case, we shall see, an hour before the opening bell, whether employment trends continue to bring post-Covid lows and whether demand for retail goods and services remains robust.
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Trade Desk, Okta, Microsoft and Moderna highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 16, 2021 – Zacks Equity Research Shares of The Trade Desk, Inc. (TTD - Free Report) as the Bull of the Day, Okta, Inc. (OKTA - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Microsoft Corporation (MSFT - Free Report) and Moderna, Inc. (MRNA - Free Report) .
Here is a synopsis of all four stocks:
Bull of the Day:
The Trade Desk is the $34 billion leader in digital advertising, as an innovative demand-side platform (DSP) outside the "walled gardens" of Google and Facebook.
I call them the "CME of Advertising" because of their programmatic platform which enables all ad buyers to set up algorithms based on customer data and targeting -- and then have the program bid for ad space, in real-time, across the web and connected-TV.
These ad buying programs can then run automatically and continuously according to the buyer's budget, geographies and time zones -- just like the modern hedge fund "algos" that scour the financial markets for trading opportunities.
This eliminates time-consuming "insertion orders" for ad buying as the platform serves the ad buyer with instant access to consumer data and markets on endless internet real estate and Connected-TV (C-TV) platforms like Roku.
Dominant Tech Platforms Don't Come Cheap
After another strong beat-and-raise quarterly report on August 9, TTD shares reached for their old highs above $90 but have fallen into a downtrend on the overall pullback in software valuations.
TTD trades for just over 22 times next year's projected sales of $1.5 billion. That's rich, but that topline is growing at 40% this year, and the consensus of 30% growth next year I expect will rise.
Plus, since TTD has been consistently profitable with its "exchange model," when you add the revenue and the profit profiles together, you get a company trading solidly in the upper realms of the "Rule of 40" hurdle for software investors.
To learn more about that metric, see my most recent Cook's Kitchen dive here...
Software Valuations: How to Use the Rule of 40
Since the recent TTD report changed the minds of a lot of Wall Street analysts, I'd also bet good money that the top institutional holder who bought 11 million shares in Q2, Scottish investment fund Baillie Gifford, is probably buying more every chance they get under $70.
Those Scottish Warlords of Investing are all about disruptive technology platforms with 10 to 20-year growth trajectories.
Quarter Details and Outlook
The Trade Desk delivered EPS of $0.18, beating the Zacks Consensus Estimate of $0.13 per share. This compares to EPS of $0.09 in the year-ago quarter. These figures are adjusted for non-recurring items.
This beat represented an earnings surprise of 38.46%. Last quarter, TTD "wowed the crowd" even more with a positive surprise of 75%.
TTD posted revenues of $280 million for Q2, surpassing the Zacks Consensus Estimate by 7%, and clobbering the year-ago revenues of $139.36 million by over 100%.
In company guidance, The Trade Desk sees Q3 revenue of at least $282 million, vs. the consensus of about $275M. TTD also forecast Q3 adjusted EBITDA of $100M.
In addition to highlighting the launch of their new service Solimar, on the conference call TTD also revealed that in the second half of the year, Walmart will launch a new DSP, which integrates Walmart shopper data and is built on Trade Desk's platform.
Solimar > Covid
Maybe some of the pessimism around TTD shares at $90 after the report was due to company comments like this...
"Our business has been impacted by the COVID-19 pandemic that has significantly impacted advertiser demand. Like many companies that are ad-funded, we are facing a period of higher uncertainty in our business outlook. We expect our business performance could be impacted by issues beyond our control, such as changing economic conditions or additional shelter-in-place orders that may or may not occur."
To me that sounds like every business on the planet right now. And yet The Trade Desk is a revolutionary platform going into a global advertising market that is headed toward $1 trillion in transactions.
Imagine being a clean, fast, data-driven toll booth for that TAM (total addressable market). That's why I call them the "CME of Advertising."
And Solimar is just the ticket for launch. Here's how they describe the platform's features for the DSP market...
Brands and marketers are pioneering a new marketing normal, one that requires an innovative approach to data-driven advertising. That’s why we created Solimar. Our new platform completely reimagines the media buying experience, putting your business objectives front and center, unleashing the full power of your first-party data, and giving you access to a powerful marketplace of measurement partners.
And here was CEO Jeff Green talking about the exciting opportunities available as they give marketers more useful data -- and let's them securely bring their own data -- without violating privacy concerns of consumers...
"Our growth speaks to The Trade Desk’s position as the default DSP for the open internet. Nowhere is this more apparent than in Connected TV, as more premium streaming inventory becomes available to meet growing marketer demand for data-driven TV advertising. From a customer perspective, more of the world’s leading brands, and their agencies, joined our platform, or expanded their relationship with us.
"We also recently launched our new trading platform, Solimar, the biggest product launch in our company’s history. Solimar allows advertisers to take advantage of many opportunities in front of them today, with features such as simple and secure onboarding of first-party data; the industry’s most advanced cross-channel measurement marketplace; and advanced, multi-level goal-setting which allows our KOA AI technology to optimize campaigns for the trader.”
Analysts Boost Estimates and Price Targets
After the report and conference call, analysts moved their EPS targets much higher. This year's consensus jumped 22% from $0.64 to $0.78, representing steady 13% EPS growth.
And here were some select comments and big price target (PT) bumps...
Truist analyst Youssef Squali raised his PT on The Trade Desk to $92 from $62, noting the company posted solid Q2 results and Q3 guidance and "while visibility beyond next quarter is clouded by the re-opening and variability," the first half performance gives him confidence in the company's ability to exceed Street expectations.
With 2021-2026 estimated sales CAGR of about 30%, valuation on Trade Desk looks compelling to the Truist analyst.
KeyBanc analyst Justin Patterson raised his PT on The Trade Desk to $90 from $74, as the analyst believes TTD continues to benefit from the advertising recovery, with particular strength in C-TV and international. Coupled with the new Solimar update and efforts to improve data onboarding and efficacy, Patterson thinks high 20% to 30% y-o-y revenue growth is very achievable over the medium-term.
DA Davidson analyst Tom White raised the firm's PT on TTD to $95 from $65, citing the company's Q2 results and Q3 guidance that handily beat estimates. White believes The Trade Desk's long-term global opportunity in digital programming is as compelling as ever and that C-TV and online video remain the key drivers of Trade Desk's growth.
White added that the decision by Google to delay the deprecation of third-party cookies in Chrome provides the company with even more time to prepare for this change.
Oppenheimer analyst Jason Helfstein raised his PT on The Trade Desk to $95 from $85, arguing that Q2 results reflect TTD's ability to capitalize on linear TV budget shifting to C-TV. Helfstein adds that strong international growth for Trade Desk continues, with CTV revenue rising over 10-times in AMEA.
Susquehanna analyst Shyam Patil raised his PT on The Trade Desk to $105 from $100, calling it a "must own" stock as he continues to view the company as a multi-year growth story with several key growth drivers in play, notably CTV -- especially internationally -- and shopper marketing via Solimar.
Google's Cookie Twilight Won't Upset This New Monster
And here was one stick in the mud who reluctantly raised estimates...
Citi analyst Nicholas Jones raised the firm's PT on The Trade Desk to $85 from $60, but kept a Neutral rating on the shares. The analyst moved estimates higher on the better Q2 results and outlook than he originally expected. Jones views Trade Desk as a "dominant and best-in-class" ad-tech player, but continues to see risk associated with technology disruption and privacy regulation.
Obviously, he's talking about Google's plan to phase out 3rd-party cookies. But TTD is already planning to innovate past the need for Google's cookies, especially as they want to be agnostic about platforms and hyper-vigilant with consumer data privacy issues.
In the end, I'm betting on TTD to figure out the best ways to track data on consumer shopping and buying behavior without violating their privacy.
Disclosure: I own shares of TTD for the Zacks TAZR Trader portfolio.
Bear of the Day:
Okta is the $40 billion cybersecurity provider of cutting-edge identity solutions for corporations.
The company's products consist of Okta IT for Developers and include Single Sign-On, Mobility Management, and Adaptive Multi-Factor Authentication.
Okta reported second-quarter fiscal 2022 adjusted loss of 11 cents per share, 68% narrower than the Zacks Consensus Estimate of a loss of 35 cents. The company had reported earnings of 7 cents per share in the year-ago quarter.
Total revenues surged 57.4% year over year to $315.5 million and surpassed the consensus mark by 6.5%. The upside can be attributed to higher subscription revenues.
Subscription revenues (96.1% of total revenues) surged 59% year over year to $303.1 million. Professional services and other revenues (3.9% of total revenues) increased 26.9% year over year to $12.4 million.
EPS Estimates Try to Dig Out
Before we look at the numbers in detail, let's understand why Okta is in the cellar of the Zacks Rank now, but may soon climb out.
The good news is that after the recent quarterly report, Wall Street analysts raised EPS estimates for OKTA by a nice margin from a loss of $1.12 this year to a loss of just 75 cents.
The bad news is that this still represents another big loss year for OKTA and next year doesn't improve that much either. The company is still heavily investing in their business.
If the upward EPS estimate revisions from analysts continue, then OKTA could rise from the temporary purgatory of the Zacks Rank lower realms.
The Valuation Question
More good news is that the price/sales valuation of OKTA -- at a steep 23 times next year's consensus of $1.75 billion -- is smaller than the sales growth rate of 50% this year and 39% next year.
That's what you want to see for these high-flying software stocks, that might eat the world.
To learn more about this math, see my most recent Cook's Kitchen dive here...
Software Valuations: How to Use the Rule of 40
OKTA Quarter Details
Globally, revenues from the United States (79.3% of total revenues) in the fiscal second quarter were $250.1 million, up 48.7% year over year. International revenues (20.7% of total revenues) soared 103% year over year to $65.4 million.
Total calculated billings were $362.4 million, up 82.9% year over year. The uptick was driven by new and existing commercial as well as enterprise customers, and increased bookings.
The dollar-based retention rate in the trailing 12 months was 124%, which is a solid showing that basically measures "how much of my existing customers were adding services."
Remaining Performance Obligations (“RPO”) totaled $2.24 billion, up 57% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.1 billion, up 60% year over year.
OKTA Customer Details
Okta added an impressive 2,400 new customers in the reported quarter, taking the total customer count to 13,050, up 46% year over year.
Okta Identity Cloud’s capability to consolidate and easily integrate existing applications without compromising security or stability is attracting customers. And Okta products’ ability to automate the process, secure data, and reduce costs is clearly attracting new customers.
OKTA Operating Details
Non-GAAP total gross profit surged 52.8% year over year to $241.5 million. Gross margin contracted 230 basis points (bps) to 76.5%.
Non-GAAP research and development expenses increased 76.6% year over year to $68.7 million. Additionally, non-GAAP sales and marketing, and general and administrative expenses increased 71.9% and 85.2% year over year to $146.4 million and $50.9 million, respectively.
Non-GAAP total operating expenses increased 75.5% year over year to $266 million.
Non-GAAP operating loss was $24.5 million against operating income of $6.5 million in the year-ago quarter.
OKTA Guidance
For third-quarter fiscal 2022, Okta expects revenues in the range of $325-$327 million, which indicates year-over-year growth of 50%.
Non-GAAP operating loss is expected in the range of $34-$35 million while non-GAAP net loss is anticipated in the band of 24-25 cents per share.
For fiscal 2022, revenues are expected in the range of $1.243-$1.250 billion, indicating year-over-year growth between 49% and 50%.
Non-GAAP operating loss is expected in the range of $114-$119 million and non-GAAP net loss is anticipated between 74 and 75 cents per share.
Bottom line on OKTA: This innovative company could continue to compound annual growth in the 30-40% range with their unique security/identity solutions. Be on the watch for more EPS revisions higher and a quicker turn to profitability.
The Zacks Rank will let you know.
Additional content:
Green Across the Board at Market Close
We bounced back across the board on the market indexes Wednesday, following a sullen day of mostly selling off stocks Tuesday. Not only that, but each index reached a healthy notch upward: the Dow was up 236 points, or +0.68% — its second up day in the past three — while the Nasdaq brought in +0.82% gains. The S&P 500 was marginally better than that, +0.85%. The Russell 2000, which had been lagging the bigger indexes, was +1.11% yesterday.
Aside from the economic metrics Wednesday morning — lighter Import Prices and hotter-than-expected Empire State data — there wasn’t much by way of a catalyst for market activity. It would appear some buy-levels of valuation had begun to pop onto the screen after the first half of September saw some stock shedding, but it doesn’t look like a -5% hit to the market on the way. At least it doesn’t look like that right now. Shares closed yesterday near session highs.
All four market indexes are off the recent highs we saw last Thursday, so even today’s healthy trading environment wasn’t enough to correct for the selling in one fell swoop. For the day, only the Utilities sector — which led markets in yesterday’s down-trading — failed to close in the green. The other 10 S&P segments all found their way to positive territory.
We learned about a Microsoft share buyback program in the works, to the tune of $60 billion. The company will be raising its dividend yield 11%. Shares of Microsoft gained about +1.7% on the day, following an impressive year-to-date gain of +37%. Once the stock advanced higher, it had mostly plateaued until a final small burst toward the end of the regular trading session.
Moderna released data Wednesday, illustrating that a year after vaccine recipients received their first of two doses, the efficacy appears to give less protection. The study compared results versus subjects who were given placebo, who subsequently received their vaccine at a later date. A measurable number of breakthrough cases occurred with those subjects who were given the vaccine earlier compared with those who were vaccinated later.
Thursday we get more important economic data, including Initial and Continuing Jobless Claims, Retail Sales and a new Philly Fed survey. This morning we saw the Empire State index roar ahead of expectations; perhaps Philly Fed will follow suit? In any case, we shall see, an hour before the opening bell, whether employment trends continue to bring post-Covid lows and whether demand for retail goods and services remains robust.
Questions or comments about this article and/or its author? Click here>>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.