Key Points
The company has faced a challenging period in recent years. Although its stock price approached $200 during fiscal year 2023, it subsequently fell to around $60, primarily due to a significant drop in net revenue retention rate—from over 120% to approximately 106%.
Analysts at Raymond James believe this hurdle is about to end. Given that Okta's contract terms are typically less than three years, most contracts signed during the pandemic have now completed their renewal cycles.
The company's analysis indicates that Okta's deferred revenue metrics and subscription trends suggest that future performance may exceed current market expectations.
Raymond James anticipates that Okta's revenue growth will exceed 10% by fiscal year 2027. This expectation is higher than Okta's own guidance of 8.9%, which, if the analysts' assessment is accurate, could provide unexpected upside potential.
Stock Valuation
The current forward P/E ratio is 17.8, indicating a relatively reasonable valuation, suggesting that the market may have already factored in a conservative growth trajectory.
According to GuruFocus, Okta's intrinsic value is $102.33, with the current market price reflecting a 34.2% discount compared to this calculation. The platform gives Okta a GF score of 69/100, indicating a good rating in financial stability (8/10) and growth potential (8/10), but weaker performance in profitability (4/10) and price momentum (1/10).
Recent insider trading has raised concerns. Over the past three months, company insiders have sold approximately $5.1 million worth of shares without corresponding purchases.
AI Opportunities
Raymond James emphasizes that artificial intelligence is a potential growth catalyst. As the company transitions from experimental AI projects to full implementation, AI-driven agents entering operational environments will require unique identity management solutions—an area where Okta can further capture market share.
Other Wall Street firms have also expressed optimism. DA Davidson maintains a buy rating with a target price of $110. BMO Capital has raised its target price to $97, while Cantor Fitzgerald reaffirmed its overweight rating following Okta's impressive Q4 fiscal year 2026 performance.
The reporting period exceeded analysts' expectations in revenue, unfulfilled performance obligations, operating profit margins, and earnings per share.
Okta achieved an 11.84% revenue growth over the past 12 months while maintaining a gross margin of 77.36%.
The stock's 52-week trading range has been from $62.66 to $127.57, with the current price point of $67.35 nearing the lower end of that range.