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Okta (OKTA) Exceeds Market Returns: Some Facts to Consider

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Okta (OKTA - Free Report) closed the most recent trading day at $95.01, moving +0.83% from the previous trading session. The stock's change was more than the S&P 500's daily gain of 0.03%. Meanwhile, the Dow gained 0.41%, and the Nasdaq, a tech-heavy index, added 0.12%.

The cloud identity management company's stock has dropped by 11% in the past month, falling short of the Computer and Technology sector's loss of 0.55% and the S&P 500's loss of 0.9%.

Market participants will be closely following the financial results of Okta in its upcoming release. The company's upcoming EPS is projected at $0.54, signifying a 145.45% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $604.33 million, showing a 16.67% escalation compared to the year-ago quarter.

OKTA's full-year Zacks Consensus Estimates are calling for earnings of $2.28 per share and revenue of $2.48 billion. These results would represent year-over-year changes of +42.5% and +9.66%, respectively.

Any recent changes to analyst estimates for Okta should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Right now, Okta possesses a Zacks Rank of #2 (Buy).

In terms of valuation, Okta is presently being traded at a Forward P/E ratio of 41.41. This valuation marks a premium compared to its industry's average Forward P/E of 26.28.

Also, we should mention that OKTA has a PEG ratio of 1.91. 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 1.51 as of yesterday's close.

The Internet - Software and Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 29, finds itself in the top 12% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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