JPMorgan Upgrades Okta, Inc (OKTA) to Overweight

JPMorgan analyst Brian Essex upgraded Okta, Inc (NASDAQ: OKTA) from Neutral to Overweight with a price target of $100.00.

The analyst comments "Okta reset expectations with a conservative initial look at FY26 revenue growth this quarter and now the risk/reward is attractive in our view as we see Identity moving up the priority stack. OKTA is a leader in IAM, one of the most significant pure-play security cloud vendors in the space, and we think initial 7% growth expectations set a conservative bar for growth in FY26. Considering cRPO growth of 12.7% y/y in the quarter with estimated bookings growth that accelerated to 30% y/y gives us better confidence that traction is improving for Okta in its markets. Meanwhile, initial 22% operating margin and 24% FCF margin guidance for next year implies better than expected profitability as well. With the stock currently trading at 17.0x EV/FCF on our CY26 estimates, we like the stock here as we see potential for meaningful improvement in fundamental performance and multiple expansion with execution. We think the growing strategic importance of Identity Security will prove an incremental tailwind for OKTA for greenfield and replacement opportunities. We view OKTA well positioned for top-line reacceleration as we see signs recent investment is beginning to support better growth into next year. We believe growth will be driven by 1) large enterprise momentum, 2) OKTA’s ability to sell new products, and 3) international penetration. We are upgrading OKTA to Overweight from Neutral as we reiterate our CY25 price target of $100, implying 22% upside to the closing price as of 12/13/24."

For an analyst ratings summary and ratings history on Okta, Inc click here. For more ratings news on Okta, Inc click here.

Shares of Okta, Inc closed at $81.99 yesterday.

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