I last wrote about Okta (OKTA) as the Bull of the Day in December after their earnings report saw the stock shoot above $90 for the first time since the August gap down.
As shares slipped back down towards $80 on needless confusion about their outlook, I thought it was another prime opportunity to add. If you followed my lead, you're sitting with potential gains of 15-20% or more.
And now OKTA, a $17 billion provider of leading identity security solutions, is back to the upper realms of the Zacks Rank after EPS estimates turned north again.
OKTA reports their Q4 FY25 (ended January) on March 3 and analysts have bumped their EPS growth consensus to 73%, from 69% previously. More importantly, they are edging up estimates for this fiscal year (began February).
This is important as OKTA is still recovering from a security breach that dampened business for several quarters.
But if anyone can recover from that incident, I think it's OKTA who lives and breathes this stuff in the age of AI and machine learning hacks that are making passwords obsolete and demanding new identity security tools.
Why I Think OKTA Has a Bright Future
Here's what I wrote in Q4 about OKTA...
Besides that fact that the company specializes in "identity security," in essence making sure that the person authorized for an IT function is the one being authenticated and monitored, they are also aggressively pursuing the edges of new AI threat vectors.
Yesterday, they rolled out an expansion of an existing service, Auth0, to attract more corporate clients as the threat landscape evolves. Traditional identity threats, bolstered by AI advances, are enabling low-quality, high-intensity attacks to become more dangerous and helping new, personalized attacks to emerge.
With bots making up nearly 50% of all internet traffic, developers are challenged with securing their applications in this landscape. Multi-factor authentication (MFA), with possession-based or biometric factors, remains as one of the most effective defenses.
Conversely, AI can also power bot detection, with AI helping Okta block 79% of automated login attempts and recently reduce bot traffic by 90% over a 90 day period.
Apple, McLaren, and the Magic Quadrant
February has been eventful for OKTA with a new COO who investors seem to favor since he's been around a while. And this week, Keybanc raised their PT on shares from $115 to $125.
To find out what else is new at OKTA under the surface, I spent a couple hours going through the investor relations site, press releases, and their blog to discover three very interesting developments.
Two weeks ago, Okta announced a multi-year partnership with the McLaren Racing Formula 1 Team. The partners aim to identify new ways to secure and improve the digital experience for over 500 million premier racing fans, partners, and employees around the world.
In December, OKTA was recognized as a Leader in the 2024 Gartner Magic Quadrant for Access Management for the eighth consecutive year. Gartner defines access management (AM) as tools that include authentication and single sign-on (SSO) capabilities, and that establish, manage and enforce runtime access controls for modern standards-based and classic web applications and APIs. The report evaluated 10 vendors on 15 criteria and placed Okta in the Leaders Quadrant among Microsoft and IBM.
Finally, if you are going to serve a premier technology company who values security more than any, who are you going to choose? Apple of course. I'm in the market for a new iPhone myself (as I tend to use them 3-4 years) and I was surprised to learn there will be no more fingerprint ID to access my phone. They have gone full facial.
Okta’s integration with Apple strengthens security, elevates user experience, and eases administration, according to a recent report last week by Stephanie Toh, Senior Product Marketing Manager. While the full report gets a little technical, this was something I could grasp...
Apple enables enterprise Identity providers (IdPs) to be integrated with Apple Business Manager. Okta was proud to be one of the first Identity providers to implement this capability, as our integration with Apple Business Manager and Apple School Manager delivers the secure and seamless capabilities needed by both users and administrators.
If you are a big Apple user in your personal or business life with Macs and other tools, I highly recommend going to the linked report above as it also has a series of videos describing the integrations for Apple Business Manager.
Bottom line: OKTA getting tapped by Apple for extensive integrations in the aftermath of previous security issues is just the confidence boost they needed.
As an OKTA shareholder, I am looking forward to hearing what the full-year outlook brings on March 3 and see if we can get OKTA back above $100.
I love the setup for OKTA going into earnings with CrowdStrike (CRWD) and CyberArk (CYBR) both launching to new highs this week on their strong metrics.
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Okta, Inc. (OKTA) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
