Okta, Inc (OKTA) PT Raised to $130 at Evercore ISI
Evercore ISI analyst Kirk Materne raised the price target on Okta, Inc (NASDAQ: OKTA) to $130.00 (from $122.00) while maintaining a Outperform rating.
The analyst comments "OKTA reported a solid quarter, but results fell short of buy-side expectations as the magnitude beat was light relative to historical performance. While OKTA beat the quarter, subscription revenue growth of 11.6% y/y, missed the bogey. With the stock up ~60% YTD, expectations heading into the print were elevated and rightfully so given the positive channel checks, as well as mgmt’s F4Q25 commentary suggesting that prior execution issues were behind them. Investors were hoping F1Q would indicate a potential inflection point for the business, but the muted upside will probably temper enthusiasm. Mgmt did not raise the FY guide despite the F1Q beat, effectively lowering the 2H. Macro conditions have had no material impact on the business, but mgmt is taking a cautious stance to account for potential deterioration. The GTM changes, including the introduction of a specialized sales force on Feb 1st were already factored into the prior guide and played no role in the updated guide. Investors will likely focus on the continued NRR decline, down to 106% from 107% last quarter. While we expected stabilization, the dip reflects a seasonally higher mix of net new customer adds in F1Q. A 2H NRR rebound remains in play. CRPO grew 14.3% y/y, but bookings rose just 8.7%, missing expectations. Mgmt cited seasonality, with Q1 typically the weakest bookings quarter. Still, the implied Q2 guide suggests two consecutive quarters of declines, which may raise doubts about a 2H reacceleration. Using mgmt’s CRPO coverage ratio (in-quarter sub rev divided by prior-quarter CRPO) and applying historical seasonality from FY24 & FY25, our analysis supports a likely 2H recovery. While mgmt indicated they are no longer guiding as conservatively as in the past, our model, based on their framework, suggests there is meaningful upside if bookings were to follow historical trends. Bottom line: The soft CRPO bookings and subdued guide will provide N/T fuel for the bears. However, we view any pullback as a potential buying opportunity for those who were reluctant to chase the stock following its ~60% YTD run. The risk/reward remains highly compelling, in our view, especially for a best-inclass identity asset that remains the top investment priority in CY25. We adjust our PT to $130 (~7x EV/CY26 sales) as we believe there will be upside to the numbers."