Okta, Inc. operates an integrated system that connects persons via devices. The company’s identity cloud connects various companies to pre-integrated apps and devices every day. It offers single sign-on, mobility management, adaptive multi-factor authentication, lifecycle management, and universal directory products for IT customers; and complete authentication, user management, flexible administration, API access management, and developer tools for developers. The company is headquartered in San Francisco, California.
OKTA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for OKTA, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Okta Inc ranked in the 98th percentile in terms of potential gain offered. As the table below shows, the model suggests the stock is dramatically undervalued -- investors should note, though, that such returns are always unlikely and not to be expected. As for the metrics that stood out in our discounted cash flow analysis of Okta Inc, consider:
The business' balance sheet suggests that 5% of the company's capital is sourced from debt; this is greater than merely 14.05% of the free cash flow producing stocks we're observing.
Okta Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -5.63. This coverage rate is greater than that of only 10.83% of stocks we're observing for the purpose of forecasting via discounted cash flows.
As a business, Okta Inc experienced a tax rate of about 0% over the past twelve months; relative to its sector (Technology), this tax rate is higher than just 24.65% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Okta Inc? See LITE, MOMO, TRT, PRSP, and SNE.
More specific to Okta, the company is making a name for itself through its reliance on artificial intelligence and machine learning. The company's identity security solutions can identify situations where deploying extra security precautions, such as multifactor authentication, makes sense in order to keep unwanted individuals and/or robots out of company-sensitive clouds. What's more, Okta doesn't offer a one-size-fits-all security solution.
Ping Identity (PING) is a leader in customer identity solutions, with expanding product portfolio, high Annual Recurring Revenue ((ARR))/revenue growth, profitability, and yet reasonable valued, making it a buy. Identity solutions are gaining importance in enterprise spending priorities, as identity is becoming one of the core pillars in securing businesses....
In his first "Executive Decision" segment of Mad Money Tuesday evening, Jim Cramer spoke with Todd McKinnon, co-founder and CEO of cybersecurity company Okta Inc. . Shares of Okta are up 140% from their March lows, trading for 26 times sales. It's not just corporate America that needs Okta's tools, McKinnon said.