BofA Securities upgraded Okta to Neutral from Underperform and raised its price target to $170 from $75, citing stronger growth in remaining performance obligations and traction in newer products.
The brokerage set the new target at nine times estimated fiscal 2027 enterprise value to sales, up from a prior multiple of 4.5 times. Current remaining performance obligations rose 14% year-over-year to $2.59 billion in the second quarter of fiscal 2027, exceeding BofA’s $2.51 billion forecast.
Okta guided third-quarter current RPO at $2.6 billion, above the Street estimate of $2.57 billion. Newer products contributed 30% of bookings, up from 25% in the first quarter, and deals including these offerings generated average contract values 40% higher than other transactions.
Identity Governance led growth among newer products, while Privileged Access and Identity Threat Protection continued to expand. Okta’s AI security offering added multiple multi-million-dollar customers, targeting the discovery, governance and security of AI agents.
BofA noted AI adoption remains early-stage with limited disclosed metrics and expects its contribution to fiscal 2027 results to be immaterial. The stock has gained more than 110% over the past four months, trading above its historical enterprise-value-to-sales range, which limits further upside absent sustained execution improvement.
