By Emily Dattilo

Okta has struggled to deliver consistent results in recent years, but the latest quarterly report show signs of strength, Mizuho Securities says.

Okta stock gained 19% to $103.90 in morning trading Tuesday, putting it on track for its largest daily percentage increase in more than a year, according to Dow Jones Market Data.

Analysts led by Gregg Moskowitz upgraded shares of the cloud-based software and identity-access solutions company to Outperform from Neutral. They increased their target for the stock price to $127 from $110.

Okta has faced challenges in recent years. Current remaining performance obligations, which represent the subscription backlog expected to be recognized over the next 12 months, were up 60% year over year in the fourth quarter of 2022, Mizuho said. Growth fell to 16% in the fourth quarter of 2024.

A difficult economic environment has played a big role in that, as have struggles to consistently land larger transactions, the analysts wrote. Beyond that, they said, innovation has lagged, and competition with Microsoft has proved challenging.

"And last but not least, OKTA encountered a couple of notable cybersecurity incidents in recent years," they continued. "All of this contributed to an extended period of underperformance for the stock. To put this in perspective, yesterday's share price for OKTA was equal to its level in mid-2022."

For the fourth quarter 2025, CRPO increased 15% from the year-ago quarter, a positive for BTIG analysts Gray Powell and Trevor Rambo, who had penciled in 9.4% growth.

"The quarter marked the largest degree of absolute dollar upside on CRPO since we began tracking the metric's performance versus the street in mid-2020," they wrote. The team increased their price target to $123 from $110 and maintained a Buy rating.

After markets closed Monday, Okta reported fourth-quarter earnings of 78 cents a share from revenue of $682 million. The consensus call among analysts surveyed by FactSet was for earnings of 74 cents a share from revenue of $669 million.

Okta also expects first-quarter revenue of $678 million to $680 million, comfortably above the $670 million Wall Street anticipated.

For the year, the company said it anticipates revenue of between $2.85 billion and $2.86 billion. Management's preliminary call, released on a call to discuss earnings in December, was for revenue between $2.77 billion and $2.78 billion. Analysts expected $2.79 billion.

Guggenheim analysts John DiFucci and Lawrence Vensko, who rate Okta at Buy with a price target of $130, chimed in on the financial outlook.

"Annual revenue growth guidance was raised by a material 200-300 bps, indicating confidence that positive trends will continue," they wrote. "CEO Todd McKinnon spoke of an inflection in the business as it sounds like the components of Workforce Identity are coming together to provide a platform, not only in name, but also in practice."

Write to Emily Dattilo at emily.dattilo@dowjones.com

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March 04, 2025 11:23 ET (16:23 GMT)

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