Morgan Stanley Raises Okta Price Target to $115 Amid Strong Q1 Results
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: stocktwits
- Strong Earnings Beat: Okta's Q1 revenue reached $765 million, surpassing market expectations of $751.8 million, reinforcing its leadership in the identity management sector and likely driving further stock price appreciation.
- Price Target Increase: Morgan Stanley raised Okta's price target from $101 to $115 while maintaining an 'Overweight' rating, reflecting confidence in the company's accelerating growth from new products, which may attract more investor interest.
- Optimistic Future Outlook: For Q2, Okta expects total revenue between $790 million and $794 million, representing about 9% year-over-year growth, alongside projected earnings per share of $0.95 to $0.97, indicating sustained growth potential.
- Strong Market Sentiment: Retail sentiment on Stocktwits remained 'extremely bullish' over the past 24 hours with extremely high message volumes, indicating investor confidence in Okta's future performance, with the stock gaining over 38% year-to-date.
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Analyst Views on OKTA
Wall Street analysts forecast OKTA stock price to rise
31 Analyst Rating
22 Buy
8 Hold
1 Sell
Moderate Buy
Current: 94.720
Low
75.00
Averages
114.03
High
145.00
Current: 94.720
Low
75.00
Averages
114.03
High
145.00
About OKTA
Okta, Inc. is an independent identity partner. The Company's Okta Platform and Auth0 Platform enable its customers to securely connect the right people to the right technologies and services at the right time. It offers independent and neutral cloud-based identity solutions that allow customers to integrate with nearly any application, service or cloud that they choose through its platforms. Organizations use the Company's platforms to securely access a wide range of cloud, mobile, web and Software-as-a-Service applications, on-premises servers, application programming interfaces, IT infrastructure providers, and services from a multitude of devices. Developers leverage its Okta Platform and Auth0 Platform to securely and efficiently embed identity for both human users and, increasingly, AI agents into the software they build. Auth0 for AI Agents enables developers to leverage the Auth0 Platform to secure and scale agentic applications from pilot to production.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Okta's Growth Potential in the AI Era
- Significant Revenue Growth: Okta reported an 11% year-over-year revenue increase to $765 million in Q1 of fiscal 2027, demonstrating strong performance in the identity management sector and reinforcing its market leadership.
- Earnings Exceed Expectations: The adjusted net income rose 6% to $168 million, with earnings per share at $0.91, surpassing Wall Street's forecast of $0.85, indicating ongoing improvements in profitability.
- Strong Free Cash Flow: Okta generated $271 million in free cash flow during the first quarter, reflecting operational efficiency and financial health, with full-year free cash flow projected between $855 million and $885 million, boosting investor confidence.
- AI-Driven Strategic Investment: CEO Todd McKinnon highlighted that Okta is strategically investing to become a cyber guardian for AI agents, which is expected to further expand its opportunities in the identity management market and drive future business growth.
See More
Okta Shares Surge on AI-Driven Expansion Opportunities
- Significant Revenue Growth: Okta reported an 11% year-over-year revenue increase to $765 million in Q1 of fiscal 2027, demonstrating strong performance in the identity management sector and reinforcing its market leadership.
- Product Launches Boost Business: CFO Brett Tighe noted that successful new product launches, particularly the integration of the Okta Identity Governance platform, are helping the company win more corporate clients, thereby enhancing its competitive edge.
- Sustained Free Cash Flow Growth: Okta generated $271 million in free cash flow in the first quarter, indicating robust profitability and cash generation capabilities, which provide ample funding for future investments.
- AI-Driven Market Expansion: CEO Todd McKinnon emphasized that AI agents are becoming a new workforce within organizations, and Okta is strategically investing to secure its leading position in this emerging market, further driving the company's long-term growth potential.
See More
Stocks Hit Record Highs Again, Driven by Tech Gains
- Market Performance: Last week, the S&P 500 and Nasdaq Composite rose over 1% and 2%, respectively, marking the S&P 500's ninth consecutive week of gains and the Nasdaq's eighth out of the last nine weeks, reflecting strong investor confidence in the market.
- Tech Stock Surge: Snowflake's quarterly earnings exceeded expectations and included a $6 billion AI compute deal with Amazon, leading to a more than 36% single-day stock price increase, which reignited enthusiasm across the tech sector and boosted stocks like Dell and Broadcom significantly.
- Cybersecurity Stock Volatility: Zscaler's disappointing earnings report resulted in its worst single-day performance, negatively impacting peers CrowdStrike and Palo Alto Networks; however, Okta's strong earnings report led to a 30% stock price jump, indicating ongoing demand in the cybersecurity sector.
- Middle East Situation's Market Impact: Despite mixed signals from the Middle East, rumors of peace progress between Iran and the U.S. spurred market gains, although the White House dismissed the reports, investor optimism still supported the stock market's upward trajectory.
See More
Okta Stock Hits Four-Year High Following Strong Earnings
- Significant Earnings Growth: Okta reported a 19% increase in net income for Q1 FY2027, reaching $74 million compared to $62 million last year, showcasing strong market performance that boosts investor confidence.
- Revenue Increase: Total revenues rose by 11% to $765 million, with subscription revenues also climbing 11% to $750 million, indicating sustained demand and market share expansion in the identity management sector.
- Optimistic Future Outlook: Okta anticipates a 9% year-on-year revenue growth in Q2, projecting revenues of $790 million, with total annual revenues expected between $3.185 billion and $3.205 billion, reflecting confidence in future growth.
- Strengthened Market Positioning: CEO Todd McKinnon highlighted Okta's expanding leadership as an independent identity provider, emphasizing the importance of managing identities alongside AI agents, which enhances the company's competitive edge in the market.
See More
US Stock Indices Reach All-Time Highs Amid Positive Economic Signals
- Strong Market Performance: The S&P 500 rose by 0.22%, the Dow Jones Industrial Average increased by 0.72%, and the Nasdaq 100 climbed by 0.36%, with all three indices reaching new all-time highs, reflecting market confidence in economic recovery.
- Tech Stocks Lead Gains: Dell Technologies surged 32% after reporting Q1 total revenue of $43.84 billion, significantly exceeding the consensus estimate of $35.52 billion, and raised its 2027 revenue forecast to between $165 billion and $169 billion, indicating strong market demand and growth potential.
- Positive Economic Data: The May Chicago PMI rose by 13.5 to 62.7, far surpassing expectations of 50.3, marking the fastest expansion pace in 4.25 years, which further bolstered market confidence in stocks.
- Oil Price Decline Benefits Stocks: Crude oil prices fell over 1% to a five-week low due to a preliminary agreement between the US and Iran, easing inflation concerns and supporting the upward trend in the stock market.
See More
Software Stocks Rally as Snowflake and Okta Report Strong Results
- Snowflake's Strong Performance: Snowflake saw a nearly 50% increase over four trading days following the holiday, announcing a $6 billion cloud and chip deal with Amazon, which reflects a surge in customer demand for AI tools and boosts the company's earnings guidance.
- Investor Confidence in Okta: Okta achieved a record 30% gain on Friday, with better-than-expected results indicating that businesses are ramping up investments in identity security tools to combat the rising threat of bot attacks as they transition to agentic AI.
- ETF Performance Surge: The iShares Expanded Tech-Software ETF rose 8% this week and is up 21% for May, marking its best monthly performance since October 2001, signaling a gradual recovery of market confidence in the software sector.
- Overall Industry Recovery: Companies like Atlassian and ServiceNow saw increases of 26% and over 20%, respectively, indicating a clear recovery trend in the software industry driven by partnerships with AI, despite Microsoft still being down nearly 7% year-to-date.
See More
Okta's Growth Potential in the AI Era
- Significant Revenue Growth: Okta reported an 11% year-over-year revenue increase to $765 million in Q1 of fiscal 2027, demonstrating strong performance in the identity management sector and reinforcing its market leadership.
- Earnings Exceed Expectations: The adjusted net income rose 6% to $168 million, with earnings per share at $0.91, surpassing Wall Street's forecast of $0.85, indicating ongoing improvements in profitability.
- Strong Free Cash Flow: Okta generated $271 million in free cash flow during the first quarter, reflecting operational efficiency and financial health, with full-year free cash flow projected between $855 million and $885 million, boosting investor confidence.
- AI-Driven Strategic Investment: CEO Todd McKinnon highlighted that Okta is strategically investing to become a cyber guardian for AI agents, which is expected to further expand its opportunities in the identity management market and drive future business growth.
See More
Okta Shares Surge on AI-Driven Expansion Opportunities
- Significant Revenue Growth: Okta reported an 11% year-over-year revenue increase to $765 million in Q1 of fiscal 2027, demonstrating strong performance in the identity management sector and reinforcing its market leadership.
- Product Launches Boost Business: CFO Brett Tighe noted that successful new product launches, particularly the integration of the Okta Identity Governance platform, are helping the company win more corporate clients, thereby enhancing its competitive edge.
- Sustained Free Cash Flow Growth: Okta generated $271 million in free cash flow in the first quarter, indicating robust profitability and cash generation capabilities, which provide ample funding for future investments.
- AI-Driven Market Expansion: CEO Todd McKinnon emphasized that AI agents are becoming a new workforce within organizations, and Okta is strategically investing to secure its leading position in this emerging market, further driving the company's long-term growth potential.
See More
Stocks Hit Record Highs Again, Driven by Tech Gains
- Market Performance: Last week, the S&P 500 and Nasdaq Composite rose over 1% and 2%, respectively, marking the S&P 500's ninth consecutive week of gains and the Nasdaq's eighth out of the last nine weeks, reflecting strong investor confidence in the market.
- Tech Stock Surge: Snowflake's quarterly earnings exceeded expectations and included a $6 billion AI compute deal with Amazon, leading to a more than 36% single-day stock price increase, which reignited enthusiasm across the tech sector and boosted stocks like Dell and Broadcom significantly.
- Cybersecurity Stock Volatility: Zscaler's disappointing earnings report resulted in its worst single-day performance, negatively impacting peers CrowdStrike and Palo Alto Networks; however, Okta's strong earnings report led to a 30% stock price jump, indicating ongoing demand in the cybersecurity sector.
- Middle East Situation's Market Impact: Despite mixed signals from the Middle East, rumors of peace progress between Iran and the U.S. spurred market gains, although the White House dismissed the reports, investor optimism still supported the stock market's upward trajectory.
See More
Okta Stock Hits Four-Year High Following Strong Earnings
- Significant Earnings Growth: Okta reported a 19% increase in net income for Q1 FY2027, reaching $74 million compared to $62 million last year, showcasing strong market performance that boosts investor confidence.
- Revenue Increase: Total revenues rose by 11% to $765 million, with subscription revenues also climbing 11% to $750 million, indicating sustained demand and market share expansion in the identity management sector.
- Optimistic Future Outlook: Okta anticipates a 9% year-on-year revenue growth in Q2, projecting revenues of $790 million, with total annual revenues expected between $3.185 billion and $3.205 billion, reflecting confidence in future growth.
- Strengthened Market Positioning: CEO Todd McKinnon highlighted Okta's expanding leadership as an independent identity provider, emphasizing the importance of managing identities alongside AI agents, which enhances the company's competitive edge in the market.
See More
US Stock Indices Reach All-Time Highs Amid Positive Economic Signals
- Strong Market Performance: The S&P 500 rose by 0.22%, the Dow Jones Industrial Average increased by 0.72%, and the Nasdaq 100 climbed by 0.36%, with all three indices reaching new all-time highs, reflecting market confidence in economic recovery.
- Tech Stocks Lead Gains: Dell Technologies surged 32% after reporting Q1 total revenue of $43.84 billion, significantly exceeding the consensus estimate of $35.52 billion, and raised its 2027 revenue forecast to between $165 billion and $169 billion, indicating strong market demand and growth potential.
- Positive Economic Data: The May Chicago PMI rose by 13.5 to 62.7, far surpassing expectations of 50.3, marking the fastest expansion pace in 4.25 years, which further bolstered market confidence in stocks.
- Oil Price Decline Benefits Stocks: Crude oil prices fell over 1% to a five-week low due to a preliminary agreement between the US and Iran, easing inflation concerns and supporting the upward trend in the stock market.
See More
Software Stocks Rally as Snowflake and Okta Report Strong Results
- Snowflake's Strong Performance: Snowflake saw a nearly 50% increase over four trading days following the holiday, announcing a $6 billion cloud and chip deal with Amazon, which reflects a surge in customer demand for AI tools and boosts the company's earnings guidance.
- Investor Confidence in Okta: Okta achieved a record 30% gain on Friday, with better-than-expected results indicating that businesses are ramping up investments in identity security tools to combat the rising threat of bot attacks as they transition to agentic AI.
- ETF Performance Surge: The iShares Expanded Tech-Software ETF rose 8% this week and is up 21% for May, marking its best monthly performance since October 2001, signaling a gradual recovery of market confidence in the software sector.
- Overall Industry Recovery: Companies like Atlassian and ServiceNow saw increases of 26% and over 20%, respectively, indicating a clear recovery trend in the software industry driven by partnerships with AI, despite Microsoft still being down nearly 7% year-to-date.
See More
