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1. Company Snapshot

1.a. Company Description

Okta, Inc.provides identity solutions for enterprises, small and medium-sized businesses, universities, non-profits, and government agencies in the United States and internationally.The company offers Okta Identity Cloud, a platform that offers a suite of products and services, such as Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization; Single Sign-On that enables users to access applications in the cloud or on-premise from various devices; Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, Web applications, and data; Lifecycle Management that enables IT organizations or developers to manage a user's identity throughout its lifecycle; API Access Management that enables organizations to secure APIs; Access Gateway that enables organizations to extend the Okta Identity Cloud from the cloud to their existing on-premise applications; and Advanced Server Access to secure cloud infrastructure.


It also provides Auth0 products, including Universal Login that allows customers to provide login experience across different applications and devices; Attack Protection, a suite of security capabilities that protect from malicious traffics; Adaptive Multi-Factor Authentication that minimizes friction to end users; Passwordless authentication enables users to login without a password and supports in various login methods; Machine to Machine provides standards-based authentication and authorization; private Cloud that allows customers to run a dedicated cloud instance of Auth0; and Organizations that enables customers to independent configurations, login experiences, and security options.It offers customer support, training, and professional services.It sells its products directly to customers through sales force and channel partners.


The company was formerly known as Saasure, Inc.Okta, Inc.was incorporated in 2009 and is headquartered in San Francisco, California.

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1.b. Last Insights on OKTA

Breaking News: Okta Inc reported Q3 fiscal 2026 results exceeding expectations, with revenue of $742 million, up 12% year-over-year. The company beat on revenue, margins, and free cash flow, but the stock slipped due to high pre-earnings valuation. Okta raised full-year guidance and reported strong partner channel growth, AI product launches, and low-double-digit growth. Analysts have mixed views, with one analyst upgrading the rating but citing limited upside for estimates and continued pressure on Okta's premium sales multiple. Okta's Q4 cRPO guidance decelerated to 9% YoY.

1.c. Company Highlights

2. Okta's Q3 Earnings: A Strong Quarter with Growth Opportunities

Okta reported a solid quarter with total revenue growth, non-GAAP operating margins of 25%, and free cash flow margins of approximately 31% for Q4 guidance. The company's actual EPS came out at $0.82, beating estimates of $0.758. The financial performance was driven by strength in large customers and upsells, particularly with new products like Okta Identity Governance. Okta's CFO, Brett Tighe, highlighted a disciplined approach to investments, focusing on improving sales productivity, product innovation, and leveraging channel partners. The company ended Q3 with nearly $2.5 billion in cash, cash equivalents, and short-term investments.

Publication Date: Dec -04

📋 Highlights
  • Large Customer Strength and Upsells:: Okta's new products like Okta Identity Governance drove growth, with large customers and upsells contributing significantly to results.
  • AI Agents Opportunity:: 100+ enterprise customers engaged in Okta for AI agents, representing over $200 million in ARR, targeting a potentially massive TAM for securing AI workloads.
  • Strong Financial Position:: $510 million in convertible notes settled in Q3, ending with $2.5 billion in cash, cash equivalents, and short-term investments.
  • Revenue and Margin Growth:: Q4 and FY26 revenue guidance of 10% and 11% growth, respectively, with non-GAAP operating margins expanding to 25%–26%.

Growth Opportunities in AI Agents

Okta is helping customers secure AI agents, representing a significant new opportunity and catalyst for growth. The company has engaged with over 100 customers, representing over $200 million in existing ARR, for its Okta for AI agents solution. Okta's neutral and unified platform positions it to become the identity layer for AI agents. The recent launch of Auth0 for AI agents allows customers to build secure agents, APIs, and users more effortlessly. As Okta's CEO, Todd McKinnon, stated, the company is seeing excitement around its new products, particularly those related to securing AI and agentic identities.

Valuation Metrics

Okta's current valuation metrics are as follows: P/E Ratio of 77.66, P/B Ratio of 2.2, P/S Ratio of 5.12, EV/EBITDA of 54.25, and Free Cash Flow Yield of 4.7%. The market seems to be pricing in high growth expectations, with an estimated revenue growth of 11.5% for next year. The P/S Ratio of 5.12 indicates that investors are willing to pay a premium for Okta's revenue growth.

Operational Efficiency

Okta's sales realignment efforts earlier this year have been effective, with the sales team near a multi-year low in attrition and a multi-year high in tenure. The company has seen productivity improvements quarter-over-quarter and year-over-year. Okta plans to add sales capacity methodically, maintaining high productivity and low attrition. The focus is on larger deals, with its million-dollar deal cohort growing 17% in Q3.

Guidance and Outlook

Okta expects total revenue growth of 10% and 11% for Q4 and FY '26, respectively. The company will issue FY '27 guidance on its Q4 earnings call. Okta's management believes it has a right of first refusal on identity security acquisitions, citing its clear leadership in the space. The company's goal is to accelerate growth while maintaining its rule of 40 framework, which combines revenue growth and margins.

3. NewsRoom

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OKTA Shares Jump on Solid Q3 Earnings Beat, Revenues Increase Y/Y

Dec -04

Source: zacks.com

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Okta: Richer Rule Of 40 - Deep-Value Buy Opportunity

Dec -04

Source: seekingalpha.com

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Okta CEO Sees Big Opportunity in AI

Dec -03

Source: youtube.com

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Okta: Excuses to Sell Vs. Reasons to Buy

Dec -03

Source: marketbeat.com

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Okta Q3: I'm Giving Up On This Company (Rating Downgrade)

Dec -03

Source: seekingalpha.com

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Okta's Q3 Results: Strong Performance but Limited Visibility for FY27

Dec -03

Source: gurufocus.com

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Okta reports Q3 revenues and earnings above expectations, raises full-year guidance

Dec -03

Source: proactiveinvestors.com

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Okta (OKTA) Q3 Earnings: How Key Metrics Compare to Wall Street Estimates

Dec -03

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.87%)

6. Segments

Subscription

Expected Growth: 15%

Okta's subscription growth is driven by increasing demand for cloud-based identity and access management solutions, fueled by digital transformation, remote work, and cybersecurity concerns. The company's innovative products, strategic partnerships, and expanding global presence also contribute to its rapid growth.

Professional Services and Other

Expected Growth: 10%

Okta's Professional Services and Other segment growth is driven by increasing adoption of its identity cloud platform, expansion into new markets, and strategic partnerships. The 10% growth rate is also fueled by the rising demand for digital transformation, cloud migration, and cybersecurity solutions, as well as Okta's investments in customer success and support services.

7. Detailed Products

Okta Identity Cloud

A suite of cloud-based identity and access management solutions that enable organizations to securely connect people and technology.

Okta Workforce Identity

A comprehensive identity and access management solution for employees, providing secure access to applications, resources, and data.

Okta Customer Identity

A customer identity and access management solution that enables organizations to manage customer identities and access to applications and resources.

Okta B2B Integration

A solution that enables organizations to securely integrate with business partners and suppliers, while managing access and identities.

Okta Advanced Server Access

A solution that provides secure, fine-grained access control to servers, applications, and data, while protecting against unauthorized access.

Okta ThreatInsight

A threat detection and response solution that identifies and responds to identity-based threats in real-time.

8. Okta, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Okta's products and services are highly specialized and integrated, making it difficult for customers to find substitutes.

Bargaining Power Of Customers

Okta's customers have some bargaining power due to the availability of alternative identity and access management solutions, but Okta's strong brand and customer loyalty mitigate this power.

Bargaining Power Of Suppliers

Okta has a diverse supplier base, and its suppliers have limited bargaining power due to the company's strong market position and negotiating power.

Threat Of New Entrants

The identity and access management market is highly competitive, and new entrants can easily disrupt the market with innovative solutions, posing a significant threat to Okta's market share.

Intensity Of Rivalry

The identity and access management market is highly competitive, with many established players and new entrants vying for market share, leading to intense rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 16.75%
Debt Cost 3.95%
Equity Weight 83.25%
Equity Cost 8.82%
WACC 8.01%
Leverage 20.13%

11. Quality Control: Okta, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Dropbox

A-Score: 6.1/10

Value: 5.9

Growth: 7.9

Quality: 7.4

Yield: 0.0

Momentum: 7.5

Volatility: 7.7

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Nutanix

A-Score: 5.0/10

Value: 2.8

Growth: 8.3

Quality: 6.1

Yield: 0.0

Momentum: 7.5

Volatility: 5.3

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Okta

A-Score: 5.0/10

Value: 2.1

Growth: 9.1

Quality: 6.7

Yield: 0.0

Momentum: 7.5

Volatility: 4.3

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WEX

A-Score: 4.6/10

Value: 5.7

Growth: 6.9

Quality: 6.8

Yield: 0.0

Momentum: 2.0

Volatility: 6.0

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Squarespace

A-Score: 3.9/10

Value: 4.5

Growth: 5.3

Quality: 5.6

Yield: 0.0

Momentum: 5.0

Volatility: 2.7

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Akamai

A-Score: 3.8/10

Value: 4.0

Growth: 5.6

Quality: 5.0

Yield: 0.0

Momentum: 1.5

Volatility: 7.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

85.9$

Current Price

85.9$

Potential

-0.00%

Expected Cash-Flows