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Okta Revenue Outlook Prompts Mixed Analyst Reaction

Okta is higher after forecasting 30% revenue growth over three years. Here's the reaction from analysts.
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Shares of Okta  (OKTA) - Get Okta Inc. Report were higher after the identity-verification company projected sales growth of 30% over the next three years, fueled by the shift to remote work.

Okta expects revenue at the end of fiscal 2024 will be close to an annualized $2 billion, or about $500 million for the fourth quarter, Chief Executive Todd McKinnon said in an interview with Bloomberg News.

Okta shares at last check were rising 2.4% to $227.97. 

Here's what Wall Street analysts had to say about the company's guidance:

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-- BMO Capital Markets affirmed an outperform rating and $265 price target. The company's entry into the privileged access management and identity governance markets "is a sound decision," the investment firm said, according to Bloomberg. Okta's growth expectations "are impressive and ... reasonable given several compelling growth vectors."

-- KeyBanc analysts maintained an overweight rating and $280 price target. The investment firm lauded the San Francisco company's expansion into new markets, "although we might argue the move was overdue." KeyBanc also sees an "expanded and accelerated market opportunity."

-- Piper Sandler affirmed a neutral rating with a $235 target, saying Okta's product announcements "should shake up the competitive landscape in identity." The firm also says its confidence in the company is buoyed by the "platform vision." But Piper Sandler is concerned about the stock's valuation. 

-- Mizuho Securities affirmed a neutral rating with a $255 price target, saying that by entering new markets, Okta "has outlined a very ambitious strategy," according to Bloomberg. The investment firm is bullish on Okta's fundamentals, but the company "remains an outlier on a growth-adjusted enterprise value/annual recurring revenue basis."