Okta announced a significant improvement in its financial performance, reporting a revenue increase to USD 2,610 million for FY2025, alongside a net income of USD 28 million compared to a substantial loss in the previous year. This positive shift may have aligned favorably with market trends over the last quarter, where the market dropped 2.5%, reflecting Okta's resilience amidst a broader downturn. From a strategic standpoint, Okta announced partnerships with Incode Technologies and the McLaren Formula 1 Team, likely strengthening its market position and appealing to investors. Concurrently, the appointment of Eric Kelleher as President and COO indicated a refreshed direction for growth and identity security. Meanwhile, global economic factors such as new tariffs, which pressured tech and financial sectors, did not seem to have deterred Okta's steady performance, contributing to its 1.22% price appreciation during the period amidst a challenging market backdrop.

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Over the last year, Okta's total shareholder return, including share price and dividends, declined by 18.53%. This underperformance contrasted with a year where the US IT industry enjoyed a return of 10%. Several factors can explain Okta's performance. Despite recording a revenue increase to US$2.61 billion and a net income of US$28 million for FY2025, the company remained expensive in terms of its Price-To-Sales Ratio compared to the peer average. Additionally, Okta's shares traded below the estimated fair value of US$128.91.

Key partnerships bolstered Okta's position, such as collaborations with Zscaler and Zimperium in late 2024, which aimed to enhance security features. Furthermore, executive leadership changes, like the appointment of Eric Kelleher as President and COO in early 2025, signaled a shift in organizational focus. Despite these positive developments, Okta's stock faced challenges compared to broader market gains over the year, impacting its overall shareholder return.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NasdaqGS:OKTA.

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