• An IPO at $17 in 2017 and the stock climbs

• The company has not reported a profit- Q3 earnings came out on December 5

• Moving higher on air- OKTA needs to deliver

Okta Inc. is a company that provides identity solutions for a wide range of businesses and government agencies in the United States and around the world. The company offers a platform that it calls the “Okta Identity Cloud” with a suite of products that manage and secure identities. Okta has a sales force that directly markets products in addition to strategic business partnerships. With its headquarters in San Francisco, California, Okta has a market capitalization of $14.167 billion with a share price of $118.31 as of Friday, December 6. The company has reported a profit over the past year.

An IPO at $17 in 2017 and the stock climbs

The OKTA IPO was in 2017 after the company began operations in 2099. The IPO came to market at $17 per share.

(Source: Barchart)

As the chart shows, OKTA opened at $23.56 per share. The shares dipped to a low at $21.52 in August 2017. Since then, it has been off to the races on the upside. The most recent high came in July 2019 at $141.85.

The company has not reported a profit- Q3 earnings came out on December 5

OKTA has not yet declared a quarterly profit. However, the company has beat analyst estimates over the past four quarters.

(Source: Yahoo Finance)

The latest earnings came out last week, and once again, OKTA beat the consensus, which was for a loss of 12 cents per share. The company reported that it lost seven cents. The results were worse on a year-on-year basis when the company lost only four cents during the same quarter in 2018. However, the total revenues surged by 45% to $153 million and surpassed the consensus estimate by 7%. An increase in operating expenses of 47.1% on a year-over-year basis accompanied the rise in revenues. The company expects to lose 4-5 cents per share in Q4.

Moving higher on air- OKTA needs to deliver

An average of 19 analysts had a price target on OKTA shares of $140.63 as of Friday, December 6, with a low at $117 and a high at $168 per share.

Insiders hold only 2.16% of the shares with institutions holding 74.53%. Insiders have been net sellers of the stock over the past six months. With an average daily volume of around 2.6 million shares, the short interest in the stock as of November 15 was just under ten million shares.

Revenue growth alone is not a prescription for success. OKTA will need to show investors the money in the form of earnings, or enthusiasm for the stock will decline. The tech stock bubble that burst at the turn of this century has faded in the market’s rearview mirror. Meanwhile, another period of selling in the sector could cause shares of OKTA and others that have yet to make profits to experience a significant price adjustment.

OKTA shares were trading at $120.72 per share on Monday morning, up $2.41 (+2.04%). Year-to-date, OKTA has gained 89.22%, versus a 27.68% rise in the benchmark S&P 500 index during the same period.

About the Author: Andrew Hecht

Andy spent nearly 35 years on Wall Street and is a sought-after commodity and futures trader, an options expert and analyst. In addition to working with StockNews, he is a top ranked author on Seeking Alpha. Learn more about Andy’s background, along with links to his most recent articles. More...

More Resources for the Stocks in this Article