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Okta (OKTA) Gains But Lags Market: What You Should Know

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Okta (OKTA - Free Report) closed at $92.21 in the latest trading session, marking a +0.2% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.87%. Elsewhere, the Dow saw an upswing of 0.67%, while the tech-heavy Nasdaq appreciated by 1.11%.

Shares of the cloud identity management company witnessed a loss of 13.29% over the previous month, trailing the performance of the Computer and Technology sector with its loss of 5.98% and the S&P 500's loss of 3.97%.

The investment community will be closely monitoring the performance of Okta in its forthcoming earnings report. The company is expected to report EPS of $0.54, up 145.45% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $604.33 million, up 16.67% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $2.28 per share and a revenue of $2.48 billion, demonstrating changes of +42.5% and +9.66%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Okta. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Currently, Okta is carrying a Zacks Rank of #3 (Hold).

Looking at valuation, Okta is presently trading at a Forward P/E ratio of 40.44. This signifies a premium in comparison to the average Forward P/E of 23.55 for its industry.

It's also important to note that OKTA currently trades at a PEG ratio of 1.87. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Internet - Software and Services was holding an average PEG ratio of 1.05 at yesterday's closing price.

The Internet - Software and Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 42, positioning it in the top 17% 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.

Ensure to harness to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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