Okta Inc. (OKTA)

[DiscoverGold]

Don't Put too Much Faith in Okta, Inc. (OKTA) Stock
By: Schaeffer's Investment Research | January 18, 2022

• Is Okta stock worth its current valuation?

• OKTA is already down over 10% year-to-date

The shares of Okta, Inc. (NASDAQ: OKTA) -- an identity and access management company based in San Francisco -- have shed over 20% in the last 12 months, and over 10% this year already. While the stock managed to bounce off its Jan. 10 annual low of $184.02, familiar pressure at the 40-day moving average quickly rejected the rally, pushing OKTA back toward this low.



In fact, the equity is falling even further today, last seen down 2.2% at $199.94, thanks to a bear note from Truist Securities. The analyst cut its price target to $270 from $300. The 12-month consensus price target of $281.64 is still a lofty 40.6% premium to current levels, which could mean more price-target cuts on the horizon. Downgrades could be imminent too, as 16 of the 19 in coverage call it a "buy" or better.

From a fundamental point of view, it is difficult to see Okta stock as much more than a speculative play for investors at the moment. The security already has a massive market capitalization of $31.1 billion, with an extremely high price-sales ratio of 27.55 and no earnings have been posted yet.

Nonetheless, the cybersecurity company has a decent balance sheet with $2.48 billion in cash and $2.02 billion in total debt. In addition, Okta has managed to increase its revenues by more than 340% since fiscal 2018 and is estimated to grow another 37.3% next year. However, investors may still better suited waiting for significant weakness or for OKTA’s revenue output to rise considerably in order for its valuation to look more appealing.

Read Full Story »»»

DiscoverGold