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Okta (OKTA) Stock Sinks As Market Gains: What You Should Know

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Zacks Equity Research
·3 min read
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Okta (OKTA) closed the most recent trading day at $263.46, moving -0.2% from the previous trading session. This move lagged the S&P 500's daily gain of 0.36%. At the same time, the Dow lost 0.12%, and the tech-heavy Nasdaq gained 0.69%.

Coming into today, shares of the cloud identity management company had lost 4.21% in the past month. In that same time, the Computer and Technology sector gained 5.4%, while the S&P 500 gained 4.27%.

OKTA will be looking to display strength as it nears its next earnings release. On that day, OKTA is projected to report earnings of -$0.01 per share, which would represent no growth from the year-ago period. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $221.61 million, up 32.44% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.04 per share and revenue of $822.18 million, which would represent changes of +112.9% and +40.29%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for OKTA. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. OKTA currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, OKTA is holding a Forward P/E ratio of 6421.62. This valuation marks a premium compared to its industry's average Forward P/E of 32.87.

Also, we should mention that OKTA has a PEG ratio of 256.86. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software and Services was holding an average PEG ratio of 14.74 at yesterday's closing price.

The Internet - Software and Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 190, putting it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow OKTA in the coming trading sessions, be sure to utilize Zacks.com.


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