Okta's Subscription Revenues Accelerate: Which Factors Are Driving it?
Several strategic moves are fueling this momentum. Okta has expanded its identity platform with high-impact modules such as Identity Governance, Privileged Access and Device Access, broadening its relevance in zero-trust security environments. These new offerings accounted for 15% of new bookings in first-quarter fiscal 2026.
Meanwhile, Okta's sales organization has been restructured to better serve distinct customer segments, with separate teams focused on Workforce Identity and Customer Identity (Auth0). This targeted approach is translating into results, as the number of customers generating over $1 million in annual contract value (ACV) climbed 20% year over year.
Okta's strong financial performance, with a 27% non-GAAP operating margin and 35% free cash flow, enables continued investment in product development and market entry initiatives. This positions its subscription business as a catalyst for sustainable growth.
Okta Faces Rising Pressure in Security Race
Microsoft MSFT continues to dominate enterprise IT with Entra ID's deep integration into Azure and Microsoft 365, offering seamless identity and access management. Microsoft's expanding data and AI portfolio, including PostgreSQL, Microsoft Fabric and Azure, fuels strong cloud adoption. With breakthroughs like its Majorana quantum chip, Microsoft is advancing future tech while sustaining robust growth, making it a cornerstone of scalable, secure, and innovative enterprise infrastructure.
CrowdStrike CRWD is strengthening its cybersecurity edge with AI-driven innovations and product expansion. Its Falcon platform now boasts 29 modules, including the new Falcon Data Protection tool, enhancing data loss prevention and compliance. These upgrades, alongside rising demand for threat protection, position CrowdStrike as a leader in identity security. CrowdStrike's sustained innovation and platform growth continue to attract customers seeking robust, all-in-one cybersecurity solutions.
OKTA's Price Performance, Valuation & Estimates
Shares of Okta have appreciated 16.2% year to date compared with the Zacks Security industry's return of 17%.
OKTA's YTD Price Return Performance
Okta currently trades at a premium with a forward Price/Cash Flow ratio of 21.56, slightly higher than the broader Zacks Computer and Technology sector's 21.5X. OKTA has a Value Score of D.
OKTA Forward 12-Month Price/CF Ratio
The Zacks Consensus Estimate for OKTA's second-quarter fiscal 2026 earnings is pegged at 84 cents per share, up by 5 cents over the past 60 days, indicating 16.67% year-over-year growth.
The consensus mark for fiscal 2026 earnings is pegged at $3.28 per share, which increased 2.8% over the past 60 days. The earnings figure suggests 16.73% growth over the figure reported in fiscal 2025.
OKTA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include
Stock #1: A Disruptive Force with Notable Growth and Resilience
Stock #2: Bullish Signs Signaling to Buy the Dip
Stock #3: One of the Most Compelling Investments in the Market
Stock #4: Leader In a Red-Hot Industry Poised for Growth
Stock #5: Modern Omni-Channel Platform Coiled to Spring
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.
Download Atomic Opportunity: Nuclear Energy's Comeback free today.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Okta, Inc. (OKTA): Free Stock Analysis Report
CrowdStrike (CRWD): Free Stock Analysis Report
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
16 minutes ago
- Globe and Mail
Class Action Lawsuit Filed: Fortrea Holdings Inc. (FTRE) - Join by August 1, 2025 - Contact Levi & Korsinsky
New York, New York--(Newsfile Corp. - July 21, 2025) - If you suffered a loss on your Fortrea Holdings Inc. (NASDAQ: FTRE) investment and want to learn about a potential recovery under the federal securities laws, follow the link below for more information: or contact Joseph E. Levi, Esq. via email at jlevi@ or call (212) 363-7500 to speak to our team of experienced shareholder advocates. Cannot view this video? Visit: THE LAWSUIT: A class action securities lawsuit was filed against Fortrea Holdings Inc. that seeks to recover losses of shareholders who were adversely affected by alleged securities fraud between July 3, 2023 and February 28, 2025. CASE DETAILS: The filed complaint alleges that defendants made false statements and/or concealed that: (i) Fortrea overestimated the amount of revenue the long-term projects in its portfolio, the Pre-Spin Projects, were likely to contribute to the Company's 2025 earnings; (ii) Fortrea overstated the cost savings it would likely achieve by exiting the transition services agreements; (iii) as a result, the Company's previously announced EBITDA targets for 2025 were inflated; (iv) accordingly, the viability of the Company's post-spin-off business model, as well as its business and/or financial prospects, were overstated; and (v) as a result, the Company's public statements were materially false and misleading at all relevant times. WHAT'S NEXT? If you suffered a loss in Fortrea Holdings Inc. stock during the relevant time frame - even if you still hold your shares - go to to learn about your rights to seek a recovery. There is no cost or obligation to participate. WHY LEVI & KORSINSKY: Over the past 20 years, Levi & Korsinsky LLP has established itself as a nationally-recognized securities litigation firm that has secured hundreds of millions of dollars for aggrieved shareholders and built a track record of winning high-stakes cases. The firm has extensive expertise representing investors in complex securities litigation and a team of over 70 employees to serve our clients. For seven years in a row, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report as one of the top securities litigation firms in the United States. Attorney Advertising. Prior results do not guarantee similar outcomes.
Globe and Mail
16 minutes ago
- Globe and Mail
ITOS Stock Alert: Halper Sadeh LLC Is Investigating Whether the Sale of iTeos Therapeutics, Inc. Is Fair to Shareholders
Halper Sadeh LLC, an investor rights law firm, is investigating whether the sale of iTeos Therapeutics, Inc. (NASDAQ: ITOS) to Concentra Biosciences, LLC is fair to iTeos shareholders. Under the terms of the proposed transaction, Concentra will acquire iTeos for $10.047 in cash per share, plus one non-transferable contingent value right, representing the right to receive: (i) 100% of the closing net cash of iTeos in excess of $475 million; and (ii) 80% of any net proceeds received from any disposition of certain of iTeos' product candidates that occurs within six months following the closing. Halper Sadeh encourages iTeos shareholders to click here to learn more about their legal rights and options or contact Daniel Sadeh or Zachary Halper at (212) 763-0060 or sadeh@ or zhalper@ The investigation concerns whether iTeos and its board of directors violated the federal securities laws and/or breached their fiduciary duties to shareholders by failing to, among other things: (1) obtain the best possible consideration for iTeos shareholders; (2) determine whether Concentra is underpaying for iTeos; and (3) disclose all material information necessary for iTeos shareholders to adequately assess and value the merger consideration. On behalf of iTeos shareholders, Halper Sadeh LLC may seek increased consideration for shareholders, additional disclosures and information concerning the proposed transaction, or other relief and benefits. We would handle the action on a contingent fee basis, whereby you would not be responsible for out-of-pocket payment of our legal fees or expenses. Halper Sadeh LLC represents investors all over the world who have fallen victim to securities fraud and corporate misconduct. Our attorneys have been instrumental in implementing corporate reforms and recovering millions of dollars on behalf of defrauded investors. Attorney Advertising. Prior results do not guarantee a similar outcome.
CTV News
16 minutes ago
- CTV News
Wall Street drifts around its records ahead of a big week for profit reports
NEW YORK — U.S. stocks are drifting on Monday ahead of a week full of profit updates from big U.S. companies, which Wall Street expects to keep growing despite pressure from U.S. President Donald Trump's tariffs. The S&P 500 was 0.3 per cent higher in early trading and just above its all-time high set on Thursday. The Dow Jones Industrial Average was up 52 points, or 0.1 per cent, as of 9:35 a.m. Eastern time, and the Nasdaq composite was adding 0.4 per cent to its own record. Verizon Communications helped lead the way and rose three per cent. The telecom reported a stronger profit for the latest quarter than analysts expected, along with higher revenue than forecast. Following the strong performance, Verizon raised its forecasts for profit and other financial measures for the full year. It helped offset a 0.4 per cent dip for Microsoft, which issued an emergency fix to close off a vulnerability in its SharePoint software that hackers have exploited to carry out widespread attacks on businesses and at least some federal agencies. Block, Jack Dorsey's company behind Square, Cash App and other tech brands, jumped 6.7 per cent in its first trading after learning it will join the widely followed and imitated S&P 500 index before trading begins on Wednesday. It will replace Hess, which Chevron bought. Cleveland-Cliffs rallied 6.8 per cent after the steel producer reported a smaller loss for the spring than analysts expected. It shipped a record 4.3 million net tons of steel during the quarter, and CEO Lourenco Goncalves said the company has begun to see 'the positive impact that tariffs have on domestic manufacturing' and other things. It's a major supplier to the auto industry, and Trump's tariffs steer companies hoping to sell cars in the United States toward steel made in the country. Other companies, though, are navigating the downsides and complications of tariffs, which raise prices on all kinds of things imported to the United States. That includes General Motors, which will report its latest profit results later this week, along with such market heavyweights as Alphabet, Coca-Cola and Tesla. Many of Trump's stiff proposed tariffs are currently on pause after Trump extended the deadline for talks with other countries in order to give more time to reach potential trade deals that could lower the tax rates. The next big deadline, at least for now, is Aug. 1. It's still early days in this earnings reporting season, but most big U.S. companies have been topping analysts' expectations, as is usually the case. Some encouraging undertones may also be emerging. An upward inflection in demand for travel that United Airlines said it's seen recently, combined with some better-than-expected data on U.S. retail sales, may indicate that U.S. consumers remain in decent health and could continue to support the economy, Bank of America strategist Savita Subramanian said in a BofA Global Research report. In the bond market, Treasury yields eased. The yield on the 10-year Treasury fell to 4.38 per cent from 4.44 per cent late Friday. In stock markets abroad, indexes slipped across much of Europe after finishing modestly higher in much of Asia. Markets were closed for a holiday in Japan, where the ruling Liberal Democrats have lost their coalition majorities in both houses of parliament for the first time since 1955 following Sunday's upper house election and the loss of their lower house majority in October. A grim Prime Minister Shigeru Ishiba has vowed to stay on after the drubbing by voters frustrated over rising prices and political instability. Analysts said they expect his weakened government to crank up spending, adding to Japan's huge debt burden. ___ AP business writers Matt Ott and Elaine Kurtenbach contributed. By Stan Choe
