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Okta Shares Rise 17% Year to Date: Buy, Sell or Hold the Stock?
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Key Takeaways
Okta shares are up 16.7% YTD but lag the Computer and Technology sector's 18.2% return.
Revenues rose 12.7% to $728M in Q2, with large customers and U.S. public sector deals driving growth.
Okta expects FY26 revenues to increase 10-11% compared with 15% reported in FY25.
Okta (OKTA - Free Report) shares have appreciated 16.7% year to date (YTD), underperforming the Zacks Computer and Technology sector’s return of 18.2%. Okta’s shares can be attributed to slowing federal business, a challenging macroeconomic condition and stiff competition in the Identity and Access management domain.
Okta shares have underperformed Microsoft (MSFT - Free Report) but outperformed Palo Alto Networks (PANW - Free Report) and Cisco Systems (CSCO - Free Report) over the same timeframe. Palo Alto Networks, Cisco and Microsoft shares have appreciated 9%, 14.3% and 18.9%, respectively.
OKTA Stock’s YTD Performance
Image Source: Zacks Investment Research
Okta stock is currently trading below the 50-day and 200-day moving averages, indicating a bearish trend.
OKTA Stock Trades Below the 50-Day and 200-Day SMAs
Image Source: Zacks Investment Research
Okta shares are also overvalued, as suggested by the Value Score of D. In terms of forward 12-month price/sales (P/S), Okta is trading at 5.29X higher than Cisco’s 4.47X.
OKTA Stock's Valuation
Image Source: Zacks Investment Research
So, what should investors do with Okta stock at the current level? Let’s dig deep to find out.
OKTA Rides on Strong Portfolio and Rich Partner Base
Okta’s strong portfolio that includes new offerings, including Okta Identity Governance (OIG), Okta Privileged Access (OPA), Okta Device Access, Identity Security Posture Management (ISPM), Identity Threat Protection (ITP) with Okta AI and Fine-Grained Authorization. These new solutions are helping OKTA gain market share and drive top-line growth.
Okta is benefiting from a rich partner base that includes the likes of Amazon Web Services, CrowdStrike, Google, LexisNexis Risk Solutions, Microsoft, Netskope, Palo Alto Networks, Plaid, Proofpoint, Salesforce, ServiceNow, VMware, Workday, Yubico and Zscaler. Okta and Palo Alto Networks have expanded their partnership that combines Okta Workforce Identity and Palo Alto Networks’ Prisma Access Browser. Integration between Identity Threat Protection with Okta AI and Palo Alto Networks AI-driven Cortex SecOps platform offers organizations a unified view of identity-related risks across their entire attack surface.
In the second quarter of 2025, total revenues increased 12.7% year over year to $728 million and surpassed the consensus mark by 2.37%. Customers with more than $100K in Annual Contract Value (ACV) increased more than 7% year over year to 4,945. In the reported quarter, five of OKTA’s top 10 deals were with the U.S. public sector. Strong demand for Okta’s solutions, further supported by Cross App Access, a new open standard, is expected to boost subscription revenues in the long haul.
Okta is providing an end-to-end secure identity fabric for securing non-human identities (NHIs). OKTA offers the same level of visibility, access control, governance and remediation as human identities to NHIs. Okta offers the ability to detect and discover NHIs, provision and register them properly, authorize and protect them with appropriate policies, and govern and monitor their behavior continuously.
OKTA’s FY26 Guidance Reflects Modest Growth
For fiscal 2026, OKTA expects revenues between $2.875 billion and $2.885 billion, indicating 10-11% growth from the figure reported in fiscal 2025. The estimated growth rate is lower than 15% growth Okta reported in fiscal 2025.
Okta expects fiscal 2026 non-GAAP earnings between $3.33 and $3.38 per share. The Zacks Consensus Estimate for Okta’s earnings has increased 7 cents to $3.36 per share over the past 30 days. The earnings figure suggests 19.6% growth over the figure reported in fiscal 2025.
Okta expects third-quarter fiscal 2026 revenues between $728 million and $730 million, indicating 9-10% year-over-year growth. The current portion of the company’s remaining performance obligations is expected to be 10%.
Okta anticipates non-GAAP earnings between 74 cents and 75 cents per share. For the third quarter of fiscal 2026, the Zacks Consensus Estimate for OKTA’s earnings has inched up by a couple of cents to 76 cents per share over the past 30 days. The earnings figure suggests 13.4% year-over-year growth.
Here’s Why OKTA is Best to Avoid Now
OKTA’s innovative portfolio and rich partner base are helping the company win clients. However, a challenging macroeconomic condition, intensifying competition and a stretched valuation make the stock a risky bet in the near term.
Okta currently has a Zacks Rank #4 (Sell), which implies that investors should avoid the stock right now.
Image: Bigstock
Okta Shares Rise 17% Year to Date: Buy, Sell or Hold the Stock?
Key Takeaways
Okta (OKTA - Free Report) shares have appreciated 16.7% year to date (YTD), underperforming the Zacks Computer and Technology sector’s return of 18.2%. Okta’s shares can be attributed to slowing federal business, a challenging macroeconomic condition and stiff competition in the Identity and Access management domain.
Okta shares have underperformed Microsoft (MSFT - Free Report) but outperformed Palo Alto Networks (PANW - Free Report) and Cisco Systems (CSCO - Free Report) over the same timeframe. Palo Alto Networks, Cisco and Microsoft shares have appreciated 9%, 14.3% and 18.9%, respectively.
OKTA Stock’s YTD Performance
Image Source: Zacks Investment Research
Okta stock is currently trading below the 50-day and 200-day moving averages, indicating a bearish trend.
OKTA Stock Trades Below the 50-Day and 200-Day SMAs
Image Source: Zacks Investment Research
Okta shares are also overvalued, as suggested by the Value Score of D. In terms of forward 12-month price/sales (P/S), Okta is trading at 5.29X higher than Cisco’s 4.47X.
OKTA Stock's Valuation
Image Source: Zacks Investment Research
So, what should investors do with Okta stock at the current level? Let’s dig deep to find out.
OKTA Rides on Strong Portfolio and Rich Partner Base
Okta’s strong portfolio that includes new offerings, including Okta Identity Governance (OIG), Okta Privileged Access (OPA), Okta Device Access, Identity Security Posture Management (ISPM), Identity Threat Protection (ITP) with Okta AI and Fine-Grained Authorization. These new solutions are helping OKTA gain market share and drive top-line growth.
Okta is benefiting from a rich partner base that includes the likes of Amazon Web Services, CrowdStrike, Google, LexisNexis Risk Solutions, Microsoft, Netskope, Palo Alto Networks, Plaid, Proofpoint, Salesforce, ServiceNow, VMware, Workday, Yubico and Zscaler. Okta and Palo Alto Networks have expanded their partnership that combines Okta Workforce Identity and Palo Alto Networks’ Prisma Access Browser. Integration between Identity Threat Protection with Okta AI and Palo Alto Networks AI-driven Cortex SecOps platform offers organizations a unified view of identity-related risks across their entire attack surface.
In the second quarter of 2025, total revenues increased 12.7% year over year to $728 million and surpassed the consensus mark by 2.37%. Customers with more than $100K in Annual Contract Value (ACV) increased more than 7% year over year to 4,945. In the reported quarter, five of OKTA’s top 10 deals were with the U.S. public sector. Strong demand for Okta’s solutions, further supported by Cross App Access, a new open standard, is expected to boost subscription revenues in the long haul.
Okta is providing an end-to-end secure identity fabric for securing non-human identities (NHIs). OKTA offers the same level of visibility, access control, governance and remediation as human identities to NHIs. Okta offers the ability to detect and discover NHIs, provision and register them properly, authorize and protect them with appropriate policies, and govern and monitor their behavior continuously.
OKTA’s FY26 Guidance Reflects Modest Growth
For fiscal 2026, OKTA expects revenues between $2.875 billion and $2.885 billion, indicating 10-11% growth from the figure reported in fiscal 2025. The estimated growth rate is lower than 15% growth Okta reported in fiscal 2025.
Okta expects fiscal 2026 non-GAAP earnings between $3.33 and $3.38 per share. The Zacks Consensus Estimate for Okta’s earnings has increased 7 cents to $3.36 per share over the past 30 days. The earnings figure suggests 19.6% growth over the figure reported in fiscal 2025.
Okta expects third-quarter fiscal 2026 revenues between $728 million and $730 million, indicating 9-10% year-over-year growth. The current portion of the company’s remaining performance obligations is expected to be 10%.
Okta, Inc. Price and Consensus
Okta, Inc. price-consensus-chart | Okta, Inc. Quote
Okta anticipates non-GAAP earnings between 74 cents and 75 cents per share. For the third quarter of fiscal 2026, the Zacks Consensus Estimate for OKTA’s earnings has inched up by a couple of cents to 76 cents per share over the past 30 days. The earnings figure suggests 13.4% year-over-year growth.
Here’s Why OKTA is Best to Avoid Now
OKTA’s innovative portfolio and rich partner base are helping the company win clients. However, a challenging macroeconomic condition, intensifying competition and a stretched valuation make the stock a risky bet in the near term.
Okta currently has a Zacks Rank #4 (Sell), which implies that investors should avoid the stock right now.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.