Okta (OKTA) shares soared and printed a new three-year high this morning after the identity-security firm reported market-beating financials for its Q2 and raised guidance for the full-year.
The blockbuster earnings release prompted RBC Capital Markets raise its price target on OKTA to $195, indicating potential upside of over 15% from current levels.
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The firm’s bullish call is particularly significant given OKTA stock is already trading at more than twice its price at the start of this year.
www.barchart.comStrong Demand to Drive Okta Stock Higher
While Okta outperformed expectations across all key metrics, senior analyst Matthew Hedberg was particularly uplifted by rapid growth in the firm’s current remaining performance obligations (cRPOs).
OKTA posted a 14% year-over-year increase in bookings to an exciting $2.56 billion – reinforcing that demand for its security products remain robust in the artificial intelligence (AI) era.
Crucially, the technical setup also signals continued upside ahead.
The post-earnings surge saw OKTA shares break above their 20-day and 50-day moving averages (MAs) today, indicating an increased likelihood of sustained upward trajectory in the near term.
OKTA Shares to Benefit From AI Tailwinds
Okta now sees its revenue coming in at about $3.22 billion this year, on at least $3.90 per share of earnings (EPS) on an adjusted basis.
However, this fiscal 2027 outlook assumes minimal contribution from the company’s AI initiatives, which RBC Capital Markets dubbed a bit too conservative in its research report.
Analyst Matthew Hedberg is bullish on OKTA shares also because management said new offerings are driving enterprise cross-sells and boosting Average Contract Values by roughly 40%.
These include the likes of Okta Identity Governance (OIG) and Okta Privileged Access (OPA).
What’s the Consensus Rating on Okta?
Importantly, while OKTA stock is currently trading at a rather stretched forward price-earnings (P/E) multiple of about 75x, Hedberg isn’t alone in recommending buying it after the Q2 release.
His peers at Citizens, D.A. Davidson, Cantor Fitzgerald, and Citigroup have also raised their price targets on the San Francisco-headquartered firm recently. The consensus rating on Okta sits at Strong Buy.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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