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Okta (OKTA) Stock Sinks As Market Gains: Here's Why

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Okta (OKTA - Free Report) closed the most recent trading day at $97.84, moving -3.22% from the previous trading session. This change lagged the S&P 500's daily gain of 0.02%. Elsewhere, the Dow saw a downswing of 0.14%, while the tech-heavy Nasdaq appreciated by 0.33%.

Coming into today, shares of the cloud identity management company had gained 2.71% in the past month. In that same time, the Computer and Technology sector gained 6.31%, while the S&P 500 gained 4.93%.

The investment community will be closely monitoring the performance of Okta in its forthcoming earnings report. The company is expected to report EPS of $0.84, up 16.67% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $711.04 million, up 10.07% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $3.28 per share and a revenue of $2.86 billion, indicating changes of +16.73% and +9.44%, respectively, from the former year.

Investors should also pay attention to any latest changes in analyst estimates for Okta. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. As of now, Okta holds a Zacks Rank of #2 (Buy).

Looking at valuation, Okta is presently trading at a Forward P/E ratio of 30.8. This denotes a discount relative to the industry average Forward P/E of 75.98.

Also, we should mention that OKTA has a PEG ratio of 1.82. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Security stocks are, on average, holding a PEG ratio of 3.15 based on yesterday's closing prices.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 27, putting it in the top 11% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow OKTA in the coming trading sessions, be sure to utilize Zacks.com.


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