Okta upgraded as AI security opportunity boosts outlook

Investing.com -- Cybersecurity firm Okta is well positioned to benefit from growing enterprise demand for identity controls as companies deploy artificial intelligence agents, Citizens JMP Securities said on Wednesday, upgrading the stock and raising its price target.

The brokerage said identity has emerged as a critical layer of AI security because authorization, privilege management and activity monitoring determine the access granted to autonomous AI systems. It also expects growing vendor consolidation and stronger identity demand to support Okta's results.

Citizens upgraded Okta to Market Outperform from Market Perform and set a $170 price target. It said the company's large installed base and neutral platform position should help it expand beyond access management into identity governance, privileged access management, identity threat detection and response, and agentic identity.

For the July quarter, Citizens expects Okta to report revenue of $791.7 million and earnings of 94 cents per share, compared with consensus estimates of $793 million and 97 cents. The company is scheduled to report on Aug. 26.

Citizens said Okta's current guidance for 9%-10% revenue growth could prove conservative, with normalized growth of 10%-11% after accounting for a professional-services mix shift. The brokerage sees a path for fiscal 2027 growth to accelerate to 13%, helped by improving sales trends and newer AI security offerings that are only minimally reflected in current guidance.

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