Guggenheim Securities raised its price target on Okta Inc. to $188 from $162 on Thursday, maintaining a buy rating after the identity management company posted better-than-expected quarterly results.
Okta’s shares were trading at $134.42 at the time of the report, up from $130.56 on Aug. 25, with a market capitalization of about $23.36 billion. The company’s fiscal second-quarter adjusted earnings per share came in at $1.05, exceeding the $0.97 consensus estimate. Revenue for the period reached $805 million.
Guggenheim highlighted Okta’s gross profit margin of 77.44% and said subscription revenue has stabilized over the past four quarters. The firm also pointed to more than 50% growth in new annual contract value compared with what it described as the toughest comparison period of the year. Okta’s AI-focused products contributed to the demand surge, Guggenheim noted.
Other brokerages followed suit. BMO Capital raised its target to $187, Stifel to $180, and Citizens to $180, while Mizuho adjusted its target to $165. Okta’s Q2 free cash flow was robust, though its Q3 free cash flow guidance fell slightly below consensus. The company raised its annual free cash flow projection and revised its full-year revenue outlook upward by an amount exceeding the combined beat in Q2 results and Q3 guidance.
Looking ahead, Guggenheim expects subscription revenue stability and a strong first-half new annual contract value to drive acceleration in the second half of the fiscal year, which Okta defines as the second half of fiscal 2027.
