Back to top

Image: Bigstock

Okta (OKTA) Stock Drops Despite Market Gains: Important Facts to Note

Read MoreHide Full Article

Okta (OKTA - Free Report) closed at $67.45 in the latest trading session, marking a -1.46% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.1%. At the same time, the Dow lost 0.12%, and the tech-heavy Nasdaq gained 0.08%.

Heading into today, shares of the cloud identity management company had lost 19.49% over the past month, lagging the Computer and Technology sector's gain of 1.55% and the S&P 500's gain of 1.72% in that time.

Investors will be eagerly watching for the performance of Okta in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on November 29, 2023. Simultaneously, our latest consensus estimate expects the revenue to be $559.76 million, showing a 16.37% escalation compared to the year-ago quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.18 per share and revenue of $2.21 billion, indicating changes of +3050% and +19.14%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Okta. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Okta currently has a Zacks Rank of #3 (Hold).

Digging into valuation, Okta currently has a Forward P/E ratio of 57.91. This indicates a premium in contrast to its industry's Forward P/E of 22.9.

We can also see that OKTA currently has a PEG ratio of 1.53. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Software and Services industry currently had an average PEG ratio of 1.27 as of yesterday's close.

The Internet - Software and Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 32, this industry ranks in the top 13% of all industries, numbering over 250.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Okta, Inc. (OKTA) - free report >>

Published in