Financial Trade Freedom - Investing and Stock News
  • Investing
  • News
  • Editor’s Pick
  • Economy
  • Stock
  • Investing
  • News
  • Editor’s Pick
  • Economy
  • Stock
No Result
View All Result
Financial Trade Freedom - Investing and Stock News
No Result
View All Result
Home Investing

Okta stock price forecast: time to buy the post-earnings dip?

admin by admin
May 29, 2025
in Investing
0
Okta stock price forecast: time to buy the post-earnings dip?
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

Okta stock price suffered a big reversal this week, making it one of the worst-performing companies. It crashed by over 16% on Wednesday, erasing some of the gains made since April 7. It was trading at $105.23, its lowest level since April 28, and 17% below the highest point this year.

Okta stock price plunges after cautious guidance

Okta is one of the biggest cybersecurity companies in the US with a market capitalization of over $18 billion. It focuses on access solutions that help companies ensure seamless access by customers, employees, and partners. 

Okta’s business has grown over the years, and now counts over 20,000 clients, including top names like Peloton, FedEx, Hewlett-Packard Enterprise, and NTT Data.

The company’s annual revenue has jumped in the past few years, moving from $835 million in 2021 to $2.6 billion last year.

Read more: Two US tech stocks on the verge of initiating dividends: here’s what to watch

Okta stock price crashed this week after the company published strong results, but warned about its guidance. Its revenue rose by 12% in the first quarter to $688 million, with its subscriptions rising to $673 million.

Okta’s results also showed that its gross margin improved marginally to 81.9%, while its operating margin jumped to 26.7%. The free cash flow margin rose to 34.7%.

The challenge, however, is that the management issued a cautious outlook, citing the uncertain economic environment. It now expects that its revenue for the current quarter will be $712 million, up 10% from last year. 

It also expects that the operating income will be between $183 million and $185 million, representing a margin of 26%. The cash flow margin will be 19%. 

Okta expects that its annual revenue will grow by between 9% and 10% this year, while the free cash flow margin will be 27%. The CEO said: 

“We remain focused on driving profitable growth, accelerating innovation, and delivering the only modern, unified identity security platform for our customers.”

Is it safe to buy the Okta dip?

The forward guidance was in line with what Wall Street analysts were expecting. Their estimate for the current quarter is that its revenue will grow by 10% to $711 million, and the annual figure will rise by 9.6% to $2.86 billion. 

Therefore, the Okta stock price tumbled since Wall Street investors anticipated more from the company. The caveat is that, like many other software companies, Okta has always been highly conservative when issuing its guidance. This explains why it regularly does better than expected. 

Investors also believe that Okta stock is also relatively overvalued as it has a forward PE ratio of 38, higher than the sector median of 22. 

However, a closer look shows that it is not all that expensive. It is growing at around 10%, while its operating margin is 26%, giving it a rule-of-40 metric of 36%. While this figure is below 40, there are signs that the company is narrowing the gap.

Okta has already achieved a healthy rule of 40 when factoring the free cash flow margin, which stands at 42%.

Okta share price analysis

Okta stock chart | Source: TradingView

The daily chart shows that the Okta share price has crashed in the past few days, moving from a high of $127.5 on May 16 to the current $105. It has dropped below the 38.2% Fibonacci Retracement level at $105.93. 

It also forms a candlestick pattern with a big body and a medium-sized upper shadow. That is a sign that the stock will attempt to fill the gap, especially now that the macro factors the management talked about are easing. If this happens, the Okta stock price will likely bounce back and hit $120.

The post Okta stock price forecast: time to buy the post-earnings dip? appeared first on Invezz


Previous Post

USD/MXN forecast and why Mexican peso surge could continue

Next Post

Marvell stock price risky pattern points to a post-earnings MRVL crash

Next Post
Marvell stock price risky pattern points to a post-earnings MRVL crash

Marvell stock price risky pattern points to a post-earnings MRVL crash

  • Trending
  • Comments
  • Latest
U.S. homebuilders raise alarm over tariffs as sentiment falls to 5-month low

U.S. homebuilders raise alarm over tariffs as sentiment falls to 5-month low

February 19, 2025
Top 4 catalysts for the Dow Jones and S&P 500 this week

Top 4 catalysts for the Dow Jones and S&P 500 this week

May 25, 2025
Here’s why the German DAX index is soaring today

Here’s why the German DAX index is soaring today

May 26, 2025
Denny’s set to close dozens more locations this year, though some openings planned too

Denny’s set to close dozens more locations this year, though some openings planned too

February 16, 2025
Goldman Sachs upgrades Yum! Brands: here’s why

Goldman Sachs upgrades Yum! Brands: here’s why

0
Amazon ‘anti-union propaganda,’ employee surveillance loom over labor vote at North Carolina warehouse

Amazon ‘anti-union propaganda,’ employee surveillance loom over labor vote at North Carolina warehouse

0
As Joann Fabrics and JCPenney announce store closings, here’s what’s driving the pattern

As Joann Fabrics and JCPenney announce store closings, here’s what’s driving the pattern

0
From tariffs to DOGE, what companies are saying about the impact of MAGA policies

From tariffs to DOGE, what companies are saying about the impact of MAGA policies

0
Goldman Sachs upgrades Yum! Brands: here’s why

Goldman Sachs upgrades Yum! Brands: here’s why

June 4, 2025
SCHD ETF forecast for June and top catalysts to watch

SCHD ETF forecast for June and top catalysts to watch

June 4, 2025
Needham downgrades Apple on weak iPhone cycle, AI lag and overvaluation concerns; share falls

Needham downgrades Apple on weak iPhone cycle, AI lag and overvaluation concerns; share falls

June 4, 2025
From ‘burning platform’ to 600% surge: inside Rolls-Royce CEO’s ‘Four Pillar’ miracle turnaround

From ‘burning platform’ to 600% surge: inside Rolls-Royce CEO’s ‘Four Pillar’ miracle turnaround

June 4, 2025

    Get Smarter with Your Money – Sign Up for Free Financial Tips!


    Join our community of savvy savers and investors! By signing up, you'll receive weekly emails packed with personalized financial tips, budgeting hacks, and investment strategies tailored to your income level. Take control of your finances today – it’s free and only takes a minute!

    Recent News

    Goldman Sachs upgrades Yum! Brands: here’s why

    Goldman Sachs upgrades Yum! Brands: here’s why

    June 4, 2025
    SCHD ETF forecast for June and top catalysts to watch

    SCHD ETF forecast for June and top catalysts to watch

    June 4, 2025
    Needham downgrades Apple on weak iPhone cycle, AI lag and overvaluation concerns; share falls

    Needham downgrades Apple on weak iPhone cycle, AI lag and overvaluation concerns; share falls

    June 4, 2025
    From ‘burning platform’ to 600% surge: inside Rolls-Royce CEO’s ‘Four Pillar’ miracle turnaround

    From ‘burning platform’ to 600% surge: inside Rolls-Royce CEO’s ‘Four Pillar’ miracle turnaround

    June 4, 2025
    • About us
    • Contacts
    • Privacy Policy
    • Terms and Conditions
    • Email Whitelisting
    • About us
    • Contacts
    • Privacy Policy
    • Terms and Conditions
    • Email Whitelisting

    Disclaimer: FinancialTradeFreedom.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 financialtradefreedom.com | All Rights Reserved

    No Result
    View All Result
    • About us
    • Contacts
    • Email Whitelisting
    • Investing and Stock News
    • Privacy Policy
    • Terms and Conditions
    • Thank you

    Disclaimer: FinancialTradeFreedom.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 financialtradefreedom.com | All Rights Reserved