Okta (OKTA) Increases Yet Falls Behind Market: What Investors Need to Know
The latest trading session saw Okta (OKTA) ending at $81.28, denoting a +0.07% adjustment from its last day's close. The stock fell short of the S&P 500, which registered a gain of 1.23% for the day. Meanwhile, the Dow gained 1.06%, and the Nasdaq, a tech-heavy index, added 1.7%.
Prior to today's trading, shares of the cloud identity management company had lost 8.78% over the past month. This has lagged the Computer and Technology sector's gain of 1.98% and the S&P 500's gain of 0.94% in that time.
The investment community will be paying close attention to the earnings performance of Okta in its upcoming release. The company's earnings per share (EPS) are projected to be $0.51, reflecting a 70% increase from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $586.25 million, up 14.95% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.48 per share and revenue of $2.24 billion, indicating changes of +3800% and +20.8%, respectively, compared to the previous year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Okta. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
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. Over the past month, the Zacks Consensus EPS estimate has moved 1.15% higher. At present, Okta boasts a Zacks Rank of #2 (Buy).
Investors should also note Okta's current valuation metrics, including its Forward P/E ratio of 54.71. This valuation marks a premium compared to its industry's average Forward P/E of 22.7.
One should further note that OKTA currently holds a PEG ratio of 1.43. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. By the end of yesterday's trading, the Internet - Software and Services industry had an average PEG ratio of 1.07.
The Internet - Software and Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 69, putting it in the top 28% 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 follow all of these stock-moving metrics, and many more, on Zacks.com.
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Okta, Inc. (OKTA) : Free Stock Analysis Report
