Okta Inc (NASDAQ:OKTA) reported fiscal fourth-quarter results that topped expectations, earning the IT systems identity management company a price target upgrade from analysts at Canaccord.
The firm upped its price target to $85 from $70 and maintained its ‘Hold’ rating for the stock. In addition to the price target bump, the analysts increased their fiscal 2024 and 2025 revenue estimates from $2.13 billion to $2.16 billion and from $2.49 billion to $2.5 billion, respectively.
Investors have already sent shares nearly 10% higher to $78.17 Thursday afternoon.
Analysts noted that more companies are adopting zero trust, a cybersecurity format that companies like Okta can implement.
“We view Okta as a prime long-term beneficiary of zero trust adoption, given its positioning as a next-gen leader and consolidator in a large $80 billion total addressable market for identity security,” analysts said.
That said, there are reasons Canaccord didn’t upgrade Okta to a ‘Buy.’
“Given changes in leadership, sales attrition, recent stock move, and the macro backdrop, we maintain our Hold rating,” analysts said. “While Q4 results substantiate early traction in the refined go-to-market strategies, we await further execution before becoming more constructive with our rating.”
Another positive sign is Okta’s success in landing large deals despite an “increasingly challenging macro.”
“Okta added 550 new customers to a total of 17,600,” analysts said. “We think the company’s success with large customers highlights the increasingly powerful network effects of Okta’s platform that helps solve key identity-related issues most large enterprises face.”
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel