shares rallied ahead on Thursday open as Wall Street scrambled to become more bullish on the software company after its quarterly earnings.
According to data from FactSet, more than 20 analysts tracking the stock raised their price target in response to the company’s earnings, and two raised their rating to Buy. That gives the stock a buy rating of 64% according to the analysts surveyed.
(ticker: OKTA) Q4 fiscal profit beat expectations for earnings and revenue, while fiscal 2024 outlook also beat consensus. That sent the stock up 17% to $83.37 in premarket trading. Analysts have an average price target of $88.
Guggenheim analysts, led by John DiFucci, raised their price target for the stock from $80 to $90, reiterating a buy rating. “CEO Todd McKinnon said several times on the quarterly conference call that the company tries to keep it simple – beat and increase is the easy way to describe these results,” they said.
Despite expectations being above expectations, DiFucci said next year’s revenue expectations “still set a low bar,” adding that Okta “could do better in a plausible scenario.”
RBC Capital Markets analysts also said there was room to beat the updated guidance. “Full year 2024 revenue guidance has moved higher in absolute terms, although it looks conservative as we likely see upside with potential to accelerate growth again in FY25,” they said. They raised their price target from $95 to $100.
DA Davidson analysts raised their price target from $60 to $80, but maintained a neutral rating.
Not everyone is optimistic, however, as Evercore ISI analysts maintained their Underperform rating on the stock, citing execution risk for fiscal year 2024. They have a $65 price target.
Okta reported revenue of $510 million in the fourth quarter ending Jan. 31, beating the Wall Street consensus of $489 million. Adjusted earnings of 30 cents per share also beat expectations for 9 cents per share.
For the April quarter, the first quarter of fiscal 2024, Okta expects revenue of $509 million to $511 million, also surpassing the analyst consensus of $507 million. The company sees annual revenue of $2.16 billion to $2.17 billion.
In an interview with Barron’s, CEO Todd McKinnon said Okta is making increasing strides in selling its customer identity software business.
He noted that a new customer is ChatGPT, OpenAI’s widely popular chatbot, which uses Okta software for the application login process.
Write to Callum Keown at [email protected]