Why Okta shares are down almost 6% today


What happened

Woe betide any company that fails to meet analysts’ expectations. Friday, the technological value Okta (NASDAQ:OKTA) was hit with not one but two declines in analyst price targets, sending its stock price down almost 6%.

So what

That morning, tipsters Michael Turits of KeyBanc and Imtiaz Koujalgi of Guggenheim both cut their targets on Okta. The former’s cut was more drastic, from $225 per share to $290 previously, although it maintains its recommendation to overweight (read: buy) the stock.

Image source: Getty Images.

As for Koujalgi, he is only reducing his Okta price target. It is now at $240, not far below the previous level of $265. Like Turits, Koujalgi keeps his buy recommendation intact.

Still, the analyst is clearly concerned about the tech company’s profitability, as he was careful to note that the company’s profit margin was lower than estimated.

The adjustments made by the two analysts are just the latest after Okta reported its fiscal 2022 fourth quarter on Wednesday. The company continues to experience robust growth, with a 64% year-over-year revenue improvement. That beat analysts’ estimates, and while it turned into a non-GAAP (adjusted) net loss of nearly $29 million for the period (vs. profit of nearly $8 million), the deficit was narrower than expected.

Now what

But investors and analysts were more concerned about Okta’s immediate future. The company presented guidance for fiscal year 2023 that pointed to lower revenue growth (to around 55% from 2022) – though this was in line with top analysts’ expectations – and deep, missing losses. net income estimates.

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Eric Volkman has no position in the stocks mentioned. The Motley Fool owns and recommends Okta. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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