What Happened?
Shares of Okta, a company that makes identity management software, jumped 22.6% in the afternoon after strong fourth-quarter earnings. The company beat Wall Street’s expectations on both revenue and profit. One key number was that remaining performance obligations (RPO) grew 25% compared to last year. This shows that customers are making long-term promises to buy Okta’s services.
Sales went up 13% from last year, mostly from subscriptions. The company also managed its costs well, so its profit margins improved. This strong performance helped Okta earn more per share than expected.
The company now expects full-year sales to be even higher than Wall Street thought. However, they expect sales to grow by about 9-10%, which is a little slower than before. At the close of the day, Okta’s shares were at $108.53, which is up 24.4% from the previous close.
“Okta’s strong results and steady growth make me think it’s a solid buy,” one Reddit user said.
What the Market Is Telling Us
Okta’s shares are not very volatile. Over the last year, there have only been four moves greater than 5%. Big moves like the 22.6% jump are rare. This news has clearly changed how the market sees Okta.
Six months ago, the stock dropped 18.6% when Okta reported weak second-quarter results. At that time, its forecast for RPO was lower than expected. This hinted that the company might have trouble winning new business, especially among smaller customers who were cutting back on software spending. These issues were seen mostly in the SMB (small and medium-sized business) segment.
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On the good side, Okta beat estimates for revenue, profit, and earnings per share (EPS). Its full-year guidance for revenue and EPS was also above what analysts expected.
“The clear performance in subscriptions and improved margins are very encouraging,” another Reddit user commented.
Okta is now up 37.8% since the beginning of the year. At $108.62 per share, it is close to its 52-week high of $111.49 from March 2024. If someone bought $1,000 of Okta shares five years ago, that investment would now be worth $827.01.
Okta Stock Experts Analysis
In this okta stock experts analysis, experts note that while Okta had a challenging quarter before, its strong comeback now shows good promise. The company’s growth in long-term contracts and strong sales from subscriptions are key reasons why experts remain positive about its future.
“Even with some challenges, Okta’s ability to turn sales into profit is a big plus,” a Reddit user remarked.
Many experts see a bright future for Okta, even if the growth rate slows a little. They think the company is well positioned to benefit from long-term customer commitments.
The Bottom Line
Okta had a strong quarter that pushed its shares up by more than 22%. Its revenue, profit, and key metrics like RPO are showing good signs for the future. Although there were some challenges in the past, the current performance and full-year guidance look promising.
This okta stock experts analysis shows that while the company is facing a tougher market for new business in some segments, its overall performance is strong. Investors should keep an eye on how the company continues to grow and manage its costs.