Okta Inc. (OKTA)

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Earnings Previews: Okta Inc. (NASDAQ: OKTA)
By: 24/7 Wall St. | June 1, 2022

• Here is a look at three firms scheduled to release quarterly results after markets close Thursday.

Okta

Enterprise software company Okta Inc. (NASDAQ: OKTA) has seen its share price sink by nearly 63% over the past 12 months. A data breach in January to one of Okta’s support sub-contractors has unleashed the expected storm of lawsuits. As it turns out, apparently just two Okta customers were affected, but the company’s failure to deal with the breach in a timely and efficient way had the company’s CEO continuing to defend the firm as recently as last week.

Okta came public just over five years ago and while it has consistently beaten EPS estimates, it has posted a profit in only three of 20 quarters. The company needs to do better than that.

Of 30 analysts covering the stock, 24 rate the shares a Buy or Strong Buy, and the other six have Hold ratings. At a share price of around $83.10, the implied upside on the stock based on a median price target of $195.00 is about 135%. At the high price target of $290.00, the upside potential is nearly 250%.

First-quarter revenue is forecast at $388.77 million, up 1.5% sequentially and 54.9% year over year. Okta is expected to post a loss per share of $0.34 for the quarter, 16 cents worse than the prior quarter’s loss and 24 cents worse than the year-ago loss. For full fiscal 2023, ending in January, analysts are looking for a loss per share of $1.24, compared with a year-ago loss of $0.46 per share, on sales of $1.78 billion, up 37%. Okta is not expected to post a profit in 2023 or 2024. The multiple for estimated 2025 earnings of $0.85 per share is 96.2. The stock’s 52-week range is $77.01 to $276.30, and Okta does not pay a dividend. Total shareholder return for the past year is negative 62.7%.

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