Needham analyst Alex Henderson held a Hold on Okta, Inc. OKTA Okta's shares rallied after the close on a solid 3Q print and 4Q guide. The company said there was a material weakening of conditions, particularly in SMBs and new customers in the pipeline.
Okta noted a material erosion in conditions over the last quarter and called its guide careful. Okta is also sluggish in hiring to provide operating leverage in FY 24.
Okta hopes to drive sales productivity gains in CY 23 but the slow staffing growth suggests slower growth in FY 25.
Keith Bachman, a BMO analyst, raised the price target to $69 from $58. He thinks Okta's stock can start to move in a positive direction, as it has been a long and challenging journey.
The numerous MSFT are too low, as Microsoft Corp will continue to serve as an overhang for the multiple. The guidance is conservative. Bachman wrote that even with his estimates moving lower, he re-rated the stock.
RBC analyst Matthew Hedberg maintained Outperform and raised the price target to $80 from $70. Okta delivered solid results ahead of expectations, while FY 23 guidance moved slightly higher.
The results benefited from better sales execution and more significant deals, as well as worsened the macros.
Preliminary FY 24 guidance was provided and lower than expectations, as he thinks it creates an attractive setup for upside in FY 24 and likely a re-acceleration in FY 25.
Gregg Moskowitz, Mizuho analyst, reiterated a Buy with a $90 price target. OKTA executed much better after a very weak 2Q.
While OKTA requires investor patience and it has become a show-meme story, Moskowitz wouldn't lose sight of the fact that OKTA remains a leader in the critically important identity management market. Moskowitz said that the valuation is very compelling.
Raymond James analyst Adam Tindle maintained Market Perform. He re-rated after 3 Q results that had slightly less upside to the midpoint of growth metrics. There was more upside to profitability metrics as Okta transitioned to a new era.
Tindle previously suggested that sales leadership change may make sense at this point, but OKTA shares were higher by 24.5% at $66.36 on the last check Thursday.