Here's Why Okta (OKTA) Fell More Than Broader Market
In the latest trading session, Okta (OKTA) closed at $82.14, marking a -0.77% move from the previous day. The stock's change was less than the S&P 500's daily loss of 0.32%. Meanwhile, the Dow experienced a drop of 0.71%, and the technology-dominated Nasdaq saw a decrease of 0.2%.
Shares of the cloud identity management company have appreciated by 0.39% over the course of the past month, underperforming the Computer and Technology sector's gain of 9.33% and the S&P 500's gain of 4.59%.
Investors will be eagerly watching for the performance of Okta in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on February 28, 2024. It is anticipated that the company will report an EPS of $0.51, marking a 70% rise compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $586.25 million, up 14.95% from the year-ago period.
It is also important to note the recent changes to analyst estimates for Okta. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Okta is currently sporting a Zacks Rank of #2 (Buy).
In terms of valuation, Okta is currently trading at a Forward P/E ratio of 42.15. For comparison, its industry has an average Forward P/E of 22.43, which means Okta is trading at a premium to the group.
Also, we should mention that OKTA has a PEG ratio of 1.1. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Internet - Software and Services industry held an average PEG ratio of 0.95.
The Internet - Software and Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 93, finds itself in the top 37% echelons of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Okta, Inc. (OKTA) : Free Stock Analysis Report
