|Bid||108.14 x 1000|
|Ask||108.28 x 800|
|Day's Range||107.90 - 110.23|
|52 Week Range||41.88 - 111.94|
|Beta (3Y Monthly)||1.30|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Okta (OKTA) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Okta (NASDAQ:OKTA) has had an impressive run, with Okta stock trading under the radar as a cloud play, and cloud stocks are on fire. There's no other way to put it.As the global enterprise world pivots from on-premise to cloud-hosted solutions for price, convenience, and accessibility advantages, the providers of those cloud-hosted solutions are growing by leaps and bounds.InvestorPlace - Stock Market News, Stock Advice & Trading TipsConsequently, the stocks of cloud titans like Salesforce (NYSE:CRM), Adobe (NASDAQ:ADBE), Amazon (NASDAQ:AMZN), and ServiceNow (NYSE:NOW) have soared.Okta has gained far more than any of those headline cloud stocks over the past few years. It went public in April 2017 at $17 per share and trades today around $110.What's the story behind the huge gains from Okta stock? Cloud security. Broadly speaking, everyone and their best friend in the business world is pivoting to the cloud. That means there's a whole bunch of corporate and customer data up in the cloud. Security surrounding that data isn't all that great, hence the huge volume of hacks and data breaches over the past few years. Thus, enterprises are increasingly seeking a better cloud security solution. Okta provides just that.As such, Okta has found itself at the convergence of two secular tailwinds (cloud adoption and cybersecurity). Those two tailwinds have produced huge growth for the company. Shareholders have cheered that big growth, and Okta stock has taken off like a rocket ship.At these levels, there's no hiding the truth that Okta stock is expensive. But, is it too expensive? I don't think so. If you take a big picture outlook on the stock, this is a big growth company with a ton of upside left over the next several years.As such, I think investors who are late to the party shouldn't be too concerned. There's still plenty of long term upside left. Big Market OpportunityIn the big picture, Okta is attacking an exceptionally valuable and large market with a unique solution, and as this unique solution gains scale over the next several years, Okta's revenues and profits will continue to grow at a robust pace.Okta operates in the enterprise cloud market. This is a huge market. Global cloud spend is projected to hit $500 billion by 2020. But, only 20% of enterprise workloads have migrated to the cloud so far. Over time, that number will move towards 100% given that cloud-hosted solutions provide price, convenience, and accessibility advantages over on-premise solutions.Thus, the big cloud growth narrative is only one-fifth of way through, meaning that the enterprise cloud market is not just big, but also growing very quickly, too.Within this market, security is a big issue. Everyone is pivoting to the cloud. But, they aren't just pivoting wholesale to one cloud. Instead, the norm in the cloud market is hybrid cloud, which is essentially adopting multiple different cloud applications depending on the use case (Adobe for visual solutions, ServiceNow for automation, Salesforce for marketing, so on and so forth).Consequently, the enterprise pivot to the cloud simultaneously means a pivot of valuable corporate and customer information across various different cloud service providers.That data needs to be protected. But, protecting it isn't very easy to do. That's why we have seen so many headline data breaches and hacks over the past few years as the cloud pivot has gained momentum. Thus, consumers are increasingly seeking a uniform cloud security solution. Unique Solution Gaining ShareOkta provides this uniform cloud security solution, and does so in a unique way.Okta is creating a new cloud security solution which allows enterprises to seamlessly secure information across all cloud apps at the same time. They call this solution the Identity Cloud.Essentially, this is a cloud solution centered on individual identity that allows millions of people across a corporate ecosystem to seamlessly, securely, and uniformly connect to the technological tools that the corporation is adopting. This may sound like a complex idea. It's not. Okta is simply creating an identity-driven security solution wherein controlled identity information is the only way in and out of a system.This is a big idea. Importantly, it's a big idea that gaining traction rapidly.A few years ago, Okta had about 2,000 customers and was doing $30 million in quarterly revenue. Okta closed fiscal 2019 with 6,100 customers on a $115 million revenue quarter. Further, the company exited 2019 with 50%-plus revenue growth rate and a 40%-plus customer growth rate.In other words, not only has Okta grown very quickly over the past several years, but it is still growing very quickly today, and hardly losing any steam. As such, it is clear to see that Okta's unique Identity Cloud security solution is rapidly gaining share in the cloud security market. Big Valuation Warranted Long TermOkta stock is trading at nearly 700-times projected profits that are still two years out. Thus, this stock is richly valued. But, is it overvalued? I'd say no, if you look at the big picture.Okta has just over 6,000 customers. There are over 100 million businesses in the world, all of whom could use Okta's Identity Cloud. Further, cloud spend is at $500 billion and growing. Okta's revenues this year are projected around $535 million.Thus, in the big picture, this company is very small relative to its market opportunity. Because of this, management's long term target for 30%-plus annualized revenue growth into fiscal 2024 seems very doable. Even thereafter, this company should be able to do 20%-plus revenue growth into 2030, as more companies pivot to the cloud and cloud security demand globally grows.Under those assumptions, this could easily be a $5 billion revenue company one day, and probably by 2030. Gross margins are sky high and projected to rise north of 80% soon. Meanwhile, opex rates are big, but dropping rapidly, and could fall towards 50% at scale. That means 30% operating margins are achievable. On a $5 billion revenue base, that implies $1.5 billion in operating profits. Assuming a normal tax rate and some growth in the share count, that could flow into $8 in EPS by 2030.Application software stocks normally trade at 35-times forward earnings. Applying that average multiple to $8, a realistic 2029 price target for Okta stock is somewhere around $280. Discounted back by 10% per year, that equates to a fiscal 2020 price target of just under $120. Thus, while Okta stock is richly valued, it isn't overvalued. Yet. Bottom Line on OKTA StockOkta stock has been one of the market's biggest winners over the past two years, and with good reason. This company is in the early stages of a really powerful long term growth narrative that will produce robust profit growth over the next several years.To be sure, a lot of this upside is already priced into Okta stock. But, not all of it. As such, while gains will be more muted going forward, this stock will remain on a medium to long term uptrend for the foreseeable future.As of this writing, Luke Lango was long OKTA, CRM, ADBE, AMZN, and NOW. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for Over 20% Upside Potential * 5 Large-Cap Stocks Holding Steady Amid Trade War Concerns * 7 ETFs for Healthy Healthcare REITs Compare Brokers The post Okta Stock Is the Sleeper Cloud Play You've Been Looking For appeared first on InvestorPlace.
Coatue Management is a New York City-based hedge fund that was launched back in 1999 by Philippe Laffont. The fund provides additional office in Menlo Park, California. At the end of 2016, it held around $10.25 billion in assets under management. Coatue Management looks for the stocks to invest in from the technology sector, utilizing […]
Undeniably, one of the top growth names in the broad technology sector is Okta (NASDAQ:OKTA). A specialist in the burgeoning identity control and management segment, OKTA stock is fundamentally relevant. And it's technically relevant too, jumping to a nearly 67% year-to-date lead.Moreover, shares have really had only one trajectory since its April 2017 initial public offering. After its first session, the OKTA stock price closed up at $23.51. Since then, early stakeholders in the tech firm have profited an astonishing 349%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNow, we're at the point when OKTA stock has hit overbought levels as based on the relative strength indicator (RSI). I never recommend making a big move on any one indicator. However, it's worth noting that the last two times OKTA triggered the RSI, shares turned volatile.Adding to the reservations, Zacks Investment Research recently downgraded the shares. Although most analysts remain bullish on the OKTA stock price, a significant percentage are fence-sitters. Considering that shares have flown past the average-price target of $88.53 -- closing just shy of $110 yesterday -- not much room seemingly exists for additional upside. * 7 Cloud Stocks to Buy on Overcast Days Currently, it's a battle between technical concerns and the fundamental potential for the company. If you're thinking seriously about buying OKTA stock, though, I suggest a much-clearer route: wait. Shares will probably correct, and here are three reasons why. OKTA Stock is OvervaluedLet's just cut straight to the chase: the OKTA stock price today is simply overvalued. I'm in the same camp as fellow InvestorPlace contributor Bret Kenwell. He recognizes the company as a growth monster, but he's also rational. Kenwell writes:Generally speaking, I don't like to chase stocks. Okta may be a great company but that doesn't mean I want to pile into the name after we've seen a near-24% rally in the S&P 500 index and a near-30% rally for the PowerShares QQQ ETF (NASDAQ:QQQ) since Christmas.But it's not just about market concerns, although those are obviously important. Instead, I'm also looking at the grand scheme of things. The OKTA stock price is also overvalued relative to the identity-management industry.In 2017, the global identity and access management (IAM) market had a value of $8.85 billion. Experts in the field predict a low-double digit CAGR up to 2025. Other sector analysts are more optimistic, targeting a CAGR of 16%. That would mean by 2022, the IAM industry could have a value of approximately $24 billion.That's all great news. But OKTA sports a market capitalization of slightly over $12 billion, substantially exceeding IAM's present international market value. Further, 2018 revenue totaled just under $400 million, while net-income losses have consistently widened.In my view, this is a clear sign that the OKTA stock price has gotten well ahead of itself. OKTA Faces Serious CompetitionAlthough Okta's shares have experienced a mercurial rise to the top, it's also not surprising. IAM is an incredibly relevant industry, and it's so much more than its rather sober title suggests.Sure, IAM protocols enhance a corporation's security measures. In light of massive scandals like the Equifax (NYSE:EFX) breach, businesses are finally taking digital protections seriously. However, think about the mundane stuff, such as memorizing passwords. With Okta's solutions, you can enjoy a one-stop shop for your data-organizational needs.Again, it's no surprise that shares have skyrocketed. But because IAM is so lucrative, it attracts competition. We're not talking about bit players, either, but something that reads like the who's who of tech: Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL) and IBM (NYSE:IBM), to name but a few.At any moment, these giants could squash Okta. Plus, a buyout that would launch the OKTA stock price isn't guaranteed. After all, Amazon already has viable cloud solutions. It won't take much for them to enter IAM and disrupt it. Which leads me to… IAM Is Ripe for DisruptionSpeaking of disruption, Okta faces somewhat of a double-edged sword. On one hand, they're enjoying tremendous momentum getting their product quickly to the ground floor. But on the other hand, IAM doesn't have a very high barrier to entry.One of the obvious technologies that can benefit this industry is the blockchain. In a nutshell, the blockchain represents both a decentralized and immutable platform. It's perfect for controlling information access and to establish a perfect "paper" record of activity.But the problem for Okta as a publicly traded entity is that the blockchain is open source. Essentially, this groundbreaking technology is free. All someone needs is a good idea and some modest operational funds to potentially disrupt IAM.Okta is playing that disruptive role right now, which suits OKTA stock holders just fine. However, at this current price point, the company is too much of a risk. If you like the concept, my suggestion again is to wait. I'm almost certain we'll see a better price shortly.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Cloud Stocks to Buy on Overcast Days * 6 Stable Stocks Worth Buying for Protection * 5 Active Vanguard Funds That You Have to Own Compare Brokers The post 3 Reasons Not To Chase The Parabolic Okta Stock Price a¦ For Now appeared first on InvestorPlace.
While trade war hobgoblins may continue to haunt stocks this summer, we must consider the possibility that the recent market drop was a ruse. And by ruse, I mean a temporary pullback designed to scare the children before the market powers to new heights. In any case, there are still plenty of strong stocks to buy.Indeed, some escaped the market jitters with uptrends intact and new highs in reach. One recurring theme of the best stocks to buy on my watchlist is software. Today's trio of breakouts all hail from the same sector and industry. They boast growth metrics that Wall Street has been rewarding with big-league gains, and I see no reason why the gravy train won't continue.If anything, the recent turmoil has allowed sweet-looking bullish patterns to develop in these names providing lower risk entries for new trades.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Sell Before They Tank Your Portfolio Let's take a closer look at some notable software stocks to buy now. Shopify (SHOP) Click to Enlarge Source: ThinkorSwim 2019 is turning into a banner year for Shopify (NASDAQ:SHOP). The Canadian-born e-commerce company is up 96% year-to-date and boasts one of the best looking price trends on the planet. Last month's earnings announcement threw gasoline on the fire, sparking a resurgence in momentum.Last week's pullback was met by aggressive buyers at the rising 20-day moving average. The three-day follow through we've seen since has been relentless. And this morning's jump is pushing SHOP stock to a new record high.Throw it all together, and SHOP remains one of the best stocks to buy on the Street. If the price tag gives you pause, then consider using bull call spreads such as the July 270/290, which you can buy for around $9. MongoDB (MDB) Click to Enlarge Source: ThinkorSwim MongoDB (NASDAQ:MDB) scored one of the cleanest looking breakouts in the market yesterday. It cleared the descending trendline that has defined its behavior for the past two months. The resistance breach signals MDB stock is done resting and is ready to rise anew.The gap and run following its March earnings release shows buyers are willing to chase the stock at any price. It takes some serious firepower to push a $100 stock to $155 stock in a little over a week. And if yesterday's pop and this mornings follow through is any indication, I think we're going to see another strong push to new highs. * Top 7 Dow Jones Stocks of 2019 -- So Far Implied volatility is juiced for MDB options so if you're using derivative for your bet, try bull puts. You can sell the Jun 130/125 bull puts for $1.25 credit. Okta (OKTA) Click to Enlarge Source: ThinkorSwim Okta (NASDAQ:OKTA) is a San Francisco-based cloud software company that is up 73% year-to-date. Its shares barely budged during last week's market plunge, and it is breaking to record highs as I type. It has a long history of rewarding breakout buyers, and I suspect this morning's resistance breach will prove no different.With rising 200-day, 50-day and 20-day moving averages, bulls are dominating across all time frames. And volume patterns are largely supporting higher prices with many accumulation days in recent months.Don't overthink this one. The case for higher prices is solid. The next earnings announcement looms on May 30 and is the big X-factor that could disrupt what is otherwise a textbook bullish chart.As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Stocks to Sell Before They Tank Your Portfolio * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Low-Priced, High-Potential Tech Stocks to Buy Compare Brokers The post 3 Software Stocks to Buy As They Soar Higher appeared first on InvestorPlace.
Here's the simple definition you've been waiting for, and a look at the companies best positioned to profit from the trend.
was favored by Jim Cramer during last night's fast-paced Lightning Round on his Mad Money program on CNBC. In the daily bar chart of OKTA, below, we can see that prices have doubled over the past twelve months. The daily On-Balance-Volume (OBV) line shows a rise the past twelve months, signaling that buyers of OKTA have been more aggressive and confirms the new price highs with its own new high.
The stock market gave bulls a little reprieve on Wednesday, rallying slightly on optimism over a potential trade deal. However, there have been some stocks that have shown relative strength over the past few days compared to the broader market. There are also strong names that are barely down compared to their peers. What are they? Let's look at some top stock trades that have been holding up. Top Stock Trades for Tomorrow 1: Microsoft Click to EnlargeA very orderly pullback has occurred in Microsoft (NASDAQ:MSFT). For two straight sessions, MSFT stock has tested and held the 20-day moving average. I like simple setups and this one is simple.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 5 Big Announcements From Google I/O 2019 A break below Tuesday's low can stop short-term bulls out, who can look to get long again near $121 and/or the 50-day moving average. A bounce back to $130 could be in the cards if the 20-day holds up. Top Stock Trades for Tomorrow 2: JPMorgan Click to EnlargeAfter a strong reaction to earnings last month, JPMorgan (NYSE:JPM) stock has been surprisingly resilient over the last few weeks and days. The pullback is very similar to MSFT, in that the 20-day moving average continues to hold as support.A break below $110 could trigger a move to fill the gap back near $107. With the 50-day and 200-day moving average in this area, as well as prior resistance near $106, I would feel comfortable nibbling JPM for a longer-term position down near this level. Top Stock Trades for Tomorrow 3: Okta Click to EnlargeNow let's look at some stocks with relative strength. That is, the ones that are outperforming at a time where the market is under pressure. Watching these names are very important, because they are usually the ones that perform the best when the market snaps back and begins to rally. Take note of that (just like you should take note of the chart for Realty Income (NYSE:O)).If you only looked at Okta (NASDAQ:OKTA) this week, you probably wouldn't even know there was a selloff in the stock market. Shares continue to trend higher and so long as it maintains the 20-day moving average, it will likely continue that trend. I'm a buyer on a pullback into the 20-day.So long as it maintains $100 in the short-term, $110 is doable. As always though, know your timeframe and risk tolerance. Top Stock Trades for Tomorrow 4: Starbucks Click to EnlargeLike Okta, Starbucks (NASDAQ:SBUX) is showing no signs of stress. In fact, the stock is making a brand new high on Wednesday. Eventually these trends will end, but at a time where the market is under pressure, now is not the time to bail on SBUX.Bulls can stay long against the 20-day moving average. A break below will cause short-term investors to consider locking in some gains, but over $76 and Starbucks still looks good. Top Stock Trades for Tomorrow 5: Chipotle Click to EnlargeChipotle (NYSE:CMG) pulled back a few weeks ago, but has been strong all week while the overall market has been under pressured. * 10 Great Stocks to Buy on Dips Amid its selloff, CMG just touched its 50-day and maintained uptrend support (blue line). The setup is simple here, too. A breakout over $720 triggers more gains. A break the 20-day and uptrend support likely summons another test of the 50-day.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long SBUX. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Great Stocks to Buy on Dips * 6 Growth Stocks to Buy for the Rest of 2019 * 4 Mega-Cap Stocks to Sell Before They Melt Down Compare Brokers The post 5 Top Stock Trades for Thursday: Look at These Winners appeared first on InvestorPlace.
[Editor's note: This story was previously published in February 2019. It has since been updated and republished.]Cloud stocks are back. During the late 2018 market selloff, cloud stocks were thrown out, along with every other growth stock in the market. But as financial markets have improved in early 2019 due to stabilizing economic fundamentals, cloud stocks have come roaring back.The big rebound in cloud stocks can be chalked up to improving fundamentals and sentiment. As it turns out, the global economy isn't spiraling downward at a rapid rate. Instead, it is simply slowing at a reasonable rate to a more steady 2-3% growth rate. Amid this slowdown, cloud services demand has remained robust, since cloud services are seen both as the future and a way to cut costs amid slowing growth.InvestorPlace - Stock Market News, Stock Advice & Trading TipsConsequently, the fundamentals and sentiment underlying cloud stocks have dramatically improved over the past month. As they have, cloud stocks have soared higher. * 7 Dividend Stocks That Could Double Over the Next Five Years This rally is far from over. Considering only 20% of enterprise workloads have shifted to the cloud, it's fair to say that the rally in cloud stocks is still in its early stages. With that in mind, let's take a look a seven cloud stocks to buy now. Adobe (ADBE)Perhaps the best-in-class cloud stock to buy now for healthy upside and limited risk is Adobe (NASDAQ:ADBE).The core growth narrative here is quite promising. Adobe is one part stable-growth business with a huge moat, and one part hyper-growth business with a rapidly expanding addressable market. Those two parts put together are worth far more than what the market is saying today.On the stable growth side, Adobe is a one-stop shop digital solution for creative professionals with relatively muted competition. This has always been the case. If you can't think of any true competitors to Adobe in the creative solutions space, you aren't alone. Just check out this list or this list of Adobe Photoshop alternatives. None of them are household names. Nor do any of them offer products even close in quality to Adobe's offerings. As such, this creative solutions business is a stable growth business with a huge moat and no competition, implying healthy revenue and profit growth for the foreseeable future.On the hyper growth side, Adobe is morphing into a cloud business with a unique value prop. Other cloud solutions focus on various factors. Adobe's cloud solutions focuses on experiences and visuals, and the company is leveraging its experience in visual-oriented solutions to create cloud solutions for companies looking to enhance their consumer's experience. As it does, Adobe's revenue and profits will move considerably higher.Overall, there's a lot to like about ADBE stock. This is a big growth company that will keep growing at a big rate for a lot longer. That level of robust growth will power ADBE stock significantly higher in a long term window. Twilio (TWLO)Another best-in-class cloud stock is cloud communications app maker Twilio (NYSE:TWLO)Over the past several quarters, Twilio has emerged as the unchallenged leader in the rapidly growing Communication Platforms-as-a-Service (CPaaS) market. The CPaaS market essentially consists of companies integrating real-time communication into their services. Think of Uber or Lyft using messages to communicate with riders when their rides are approaching.This market will be huge due to continuous shifts towards cloud-based communication, personalized customer experience and digital engagement. Quite simply, as consumers, we enjoy digital, real-time, and personalized communication about the services and products we are paying for. Twilio enables this communication. That positions this company for huge growth as the CPaaS market expands over the next several years. For what it's worth, research firm IDC expects this market to grow five fold over the next five years.Thanks to its huge customer and revenue growth and 95%-plus retention rate, Twilio has emerged as the clear leader in this space. As this space matures over the next several years, companies will increasingly turn towards Twilio to enable CPaaS solutions thanks to the company's leadership position (in new industries, you always tend to trust the leader). * 7 Dividend Stocks That Could Double Over the Next Five Years As such, over the next several years, Twilio will continue to grow at a rather robust rate. This big growth will ultimately power TWLO stock higher, especially against a favorable equity backdrop. ServiceNow (NOW)In the digitization and automation fields, the cloud stock to buy is ServiceNow (NYSE:NOW).ServiceNow is currently in the business of digitizing corporate operations. This includes automating corporate workflows and IT tasks. But, this is just the tip of the iceberg for ServiceNow. Automation is a big, big market. Automating IT tasks represents just a fraction of what the automation market will look like at scale.At scale, jobs across the entire corporate ecosystem will be replaced by more efficient digitized and automated solutions. ServiceNow will provide the lion's share of these solutions. As such, as the automation revolution plays out over the next several years, ServiceNow's revenues and profits will explode higher. As they do, NOW stock will explode higher, too, considering the valuation today remains reasonable.Overall, NOW stock is a great way to play the automation revolution. This revolution is still in the first inning, and the next eight innings promise to have broad and immense financial implications. For ServiceNow, those implications are hugely positive. As such, NOW stock should trend consistently higher over the next several years. Okta (OKTA)One of the more exciting cloud stocks to consider here is Okta (NASDAQ:OKTA).Okta is pioneering what the company calls the identity cloud. Essentially, this is a cloud solution centered on individual identity that allows millions of people across a corporate ecosystem to seamlessly, securely, and uniformly connect to the technological tools that the corporation is adopting. This may sound like a complex idea. The underlying technology is complex. But, the idea isn't. The idea is that companies everywhere are rapidly adopting new technologies, and that the implementation of these technologies is often difficult, chunky, and risky to identities and data. Okta solves this problem, and allows companies to adopt new technologies seamlessly and within the same secure cloud solution.This is a big idea. Big ideas have big markets. Indeed, the addressable market for Okta's identity cloud is the whole IT space. Okta recorded revenues of $115 million last quarter from growth of nearly 60%. This is nothing new. Over the past several quarters, the average revenue growth rate has hovered around 60%. * 7 Dividend Stocks That Could Double Over the Next Five Years Thus, this is a small company that is consistently and rapidly growing in a huge market. Gross margins are high, and marching higher, leaving room for big profits at scale. Overall, this is a big growth company with a ton of potential. The valuation is big, but the amount of growth firepower underneath this business implies a tremendous opportunity to grow into the valuation, and then some, making OKTA stock an attractive long term investment here. Salesforce (CRM)The king of all cloud stocks is Salesforce (NYSE:CRM), and there's good reason for that.Salesforce is at the heart of the cloud and data revolutions. The company leverages data and analytics to deliver robust cloud solutions to enterprises that want data-driven insights. Demand for this type of service will grow by leaps and bounds over the next several years as data-driven strategies and cloud solutions become the enterprise norm. Salesforce has developed a long-standing reputation for being the best in class for delivering these services.That won't change any time soon. As such, Salesforce's revenues and profits will soar higher over the next several years as the cloud and data revolutions gain mainstream traction.This will naturally push CRM stock higher. Valuation is somewhat of a concern at nearly 60x forward earnings. But, the company has enough growth firepower through cloud and data tailwinds to grow into its valuation. Plus, valuation has been a long-running concern for this stock, and the stock has done nothing but defy those concerns and head higher over the past several years.The same will be true over the next several years, too. Cloud and data tailwinds will propel CRM stock higher, and this stock will ultimately grow into its valuation. Indeed, numbers indicate the stock could double in the long run. Amazon (AMZN)Amazon (NASDAQ:AMZN) is better known for its giant e-commerce business. But, the true profit growth driver behind Amazon is the company's cloud business -- Amazon Web Services.AWS is the world's largest cloud infrastructure services business, and it's not even close. Amazon Web Services is bigger than its four closest competitors … combined. And the company has consistently controlled more than 30% of the cloud services market.This dominance speaks volumes about just how good AWS is. Indeed, AWS is so good that even Amazon's commerce competitors are giving money to the company through AWS. Notably, Amazon's e-commerce competitor Zulily migrated its infrastructure to AWS recently. Also, AWS is so good that Amazon it is the clear front-runner to win a $10 billion Joint Enterprise Defense Infrastructure (JEDI) commercial cloud contract with the U.S. government. If Amazon were to win that contract, that would be the second huge government contract it has won this decade (AWS won a $600 million CIA contract in 2013). * 7 Dividend Stocks That Could Double Over the Next Five Years Overall, AWS is the clear leader in the cloud infrastructure services. As this market grows over the next several years, AWS will grow, too, and that will provide a big boost to Amazon's profits. A big boost to Amazon's profits will give AMZN stock firepower to head higher. Alphabet (GOOGL)Much like Amazon, Alphabet (NASDAQ:GOOGL,NASDAQ:GOOG) is better known for its non-cloud businesses.But, a significantly underappreciated and underrated aspect of Alphabet is Google Cloud. Google Cloud is a big growth, big margin business for Alphabet. To be sure, the business has lost some steam over the past several quarters as Microsoft (NASDAQ:MSFT) has gained cloud market share at a more robust pace than Alphabet recently. But, there have been some C-suite changes at Google Cloud which could give the business new direction and new firepower to regain some lost momentum.Regardless, Google Cloud will remain a 20%-plus growth business for a lot longer. Overall, Google Cloud is the key to unlocking the next leg of value in GOOGL stock. Fortunately, this business is progressing as expected, and will continue to do so over the next several years. As it does, GOOG stock will move higher.As of this writing, Luke Lango was long ADBE, TWLO, CRM, AMZN and GOOG. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dividend Stocks That Could Double Over the Next Five Years * 6 S&P 500 Stocks Ready to Break Out * 5 Mining ETFs to Dig Into Compare Brokers The post 7 Cloud Stocks to Buy Now appeared first on InvestorPlace.
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak perf...
Is Okta, Inc. (NASDAQ:OKTA) a good stock to buy? Money managers are buying. The number of long hedge fund positions jumped by 8 during the fourth quarter of 2018. There were 32 hedge funds in our database with OKTA positions at the end of September. Overall hedge fund sentiment towards OKTA is at its all time high. This […]
Okta Software (NASDAQ:OKTA) isn't a household name like Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) or Microsoft (NASDAQ:MSFT). However, that doesn't mean investors should ignore Okta stock, which is a growth monster right now.In late-March, we highlighted Okta as a top mid-cap growth stock to buy. Okta was listed alongside six other top picks that caught our eye as shares were racing higher.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWe said investors who have missed the boat thus far (although they shouldn't have based on our call that its earnings selloff was premature and an over-reaction) could hope for a buyable pullback.So far that hasn't materialized, with shares up almost 20% since that article was published. What now? Should You Chase Okta Stock Now?Generally speaking, I don't like to chase stocks. Okta may be a great company but that doesn't mean I want to pile into the name after we've seen a near-24% rally in the S&P 500 and a near-30% rally for the PowerShares QQQ ETF (NASDAQ:QQQ) since Christmas. * 7 Marijuana Companies: Which Pot Stocks Should You Buy? At some point, either the individual stock will pullback for company-specific reasons or Okta will get swept up in a market-wide correction. I'm no doomsday forecaster, but I'm realistic. Stocks don't go from Point A to Point B in a straight line. At some point, we'll get a correction in the name. Whether its 15%, 25% or 40% though, I have no idea.On a correction, investors will have to decide if Okta is a name for them. Keep in mind, the company is not yet profitable. Management's most recent outlook called for a larger-than-expected loss this year, but also better-than-expected revenue growth.At first investors sold the stock on these results, but quickly bid it back up once they realized the growth engine is still churning strong. Estimates call for almost 34% revenue growth this year and for nearly 31% growth next year.The company has $563.7 million in cash and short-term investments, while short-term debt sits at $271.6 million and Okta carries no long-term debt. However, the far more important metric is cash flow.Okta Inc already has positive operating cash flow and is very close to positive free cash flow. If these metrics are able to accelerate and if Okta can turn free cash flow positive, the stock should have even more upside.That said, Okta has one huge knock: The valuation. Shares trade at roughly 20 times this year's sales. So yeah, waiting for a pullback is certainly prudent. Trading Okta Stock Click to EnlargeSo what might a pullback in Okta look like? A 10% correction would drop Okta to ~$85.50, right in line with the 50-day moving average and current channel support. However, it's quite likely that we won't get a 10% correction fast enough to to where these levels are still relevant. It's possible, but not something we should bank on.Shares are holding up over channel resistance and if they surge higher from here, this trend could prove to act as support in the near future on a pullback. But I'm not interested in a buying a 4% or 5% pullback after an even higher run. I'm looking to get a good price on this one.I don't know if we can get a 21% decline from current levels down to $75. But if we do, I would love to consider adding Okta to your portfolio. This would drop Okta down to a critical level and put it just above the 200-day moving average. This level was resistance in September and post-earnings support in March.Aggressive bulls may consider a long position on a correction down to this $85 to $88 level and adding on a dip down to $75. Below the latter level and we'd have to re-evaluate, but as of now these are a few of the levels I'm watching on a correction.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GOOGL. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy for Spring Season Growth * This Is How You Beat Back a Bear Market * 7 Dental Stocks to Buy That Will Make You Smile Compare Brokers The post Okta Stock Is Due a Pullback, so Get Ready to Pounce appeared first on InvestorPlace.