What Happened?
Shares of identity management company Okta (NASDAQ: OKTA) jumped 3.4% in the morning session after the company reported strong second-quarter earnings that surpassed analyst expectations and raised its full-year financial forecast. The identity and access management company announced adjusted earnings per share (EPS) of $0.91 on revenue of $728 million, which grew 12.7% year-over-year. These results exceeded consensus estimates of $0.85 in adjusted EPS and $711.6 million in revenue. Looking ahead, the company provided an optimistic outlook, raising its full-year guidance for both revenue and adjusted EPS. Management now expects full-year revenue of $2.88 billion and adjusted EPS of $3.36 at the midpoint. Additionally, its revenue guidance for the upcoming third quarter also surpassed Wall Street's expectations.
After the initial pop the shares cooled down to $93.91, up 2.5% from previous close.
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What Is The Market Telling Us
Okta’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 3.3% on the news that an analyst at Truist upgraded the stock to 'Buy' from 'Hold'.
The investment firm raised its price target on the identity security company to $125 from $100, citing a potential inflection point for the business. Truist analysts noted that pressures from seat count and changes in the company's sales approach are expected to ease in the second half of fiscal 2026. The upgrade, which occurred ahead of Okta's second-quarter earnings report highlighted strengthening demand for Okta's all-in-one identity platform. This platform includes services like identity governance and administration (IGA) and privileged access management (PAM), which are seeing growing traction among customers.
Okta is up 19.1% since the beginning of the year, but at $93.91 per share, it is still trading 26.2% below its 52-week high of $127.30 from May 2025. Investors who bought $1,000 worth of Okta’s shares 5 years ago would now be looking at an investment worth $429.89.
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