Okta Inc (OKTA, Financial), a prominent player in the software industry, has recently witnessed a notable uptick in its stock performance. With a current market capitalization of $18.35 billion, the company's shares are trading at $110.97, marking a 7.54% gain over the past week. This positive momentum extends over the past three months, with a substantial 20.23% gain. When assessed against the GF Value of $150.01, Okta's current price suggests the stock is modestly undervalued, a shift from its previous status of being significantly undervalued when the GF Value was at $255.88.
Introduction to Okta Inc
Okta Inc specializes in cloud-native security solutions, focusing on identity and access management for both workforces and customers. Since its IPO in 2017, Okta has been dedicated to providing secure access to cloud-based and on-premises resources for employees, as well as secure application access for clients' customers. This dual focus has positioned Okta as a key security provider in the digital landscape.
Assessing Okta's Profitability
Despite its growth, Okta's profitability remains a concern, with a Profitability Rank of 4/10. The company's operating margin stands at -25.23%, which, while not ideal, is better than 22.35% of companies in the industry. Okta's Return on Equity (ROE) is -8.35%, surpassing 33.21% of its peers. Similarly, its Return on Assets (ROA) at -5.18% and Return on Invested Capital (ROIC) at -7.79% are better than 36.11% and 33.09% of industry companies, respectively. These figures indicate that while Okta is not the most profitable, it is performing better than a significant portion of its competitors.
Okta's Growth Trajectory
Okta's growth narrative is impressive, with a perfect Growth Rank of 10/10. The company has achieved a 33.00% 3-Year Revenue Growth Rate per Share, outperforming 85.93% of industry companies. Its 5-Year Revenue Growth Rate per Share is also strong at 31.30%, better than 91.37% of its peers. Looking ahead, Okta's Total Revenue Growth Rate is estimated at 17.09% for the next 3 to 5 years, which is more favorable than 74.8% of companies. The 3-Year EPS without NRI Growth Rate stands at a robust 47.10%, surpassing 86.8% of industry companies, and the EPS Growth Rate for the next 3 to 5 years is projected at 25.00%, better than 72.27% of the competition.
Key Shareholders in Okta
Okta's shareholder base includes notable names such as Frank Sands (Trades, Portfolio), who holds 8,358,414 shares, representing a 5.05% stake in the company. Steven Cohen (Trades, Portfolio) follows with 682,900 shares, accounting for 0.41% of the shares, and PRIMECAP Management (Trades, Portfolio) holds 655,266 shares, or 0.4%. These significant shareholders reflect confidence in Okta's business model and future prospects.
Competitive Landscape
When compared to its competitors, Okta holds its ground with a market cap that surpasses that of Gen Digital Inc (GEN, Financial) at $13.66 billion and Amdocs Ltd (DOX, Financial) at $10.59 billion, while being slightly above GoDaddy Inc (GDDY, Financial) at $16.23 billion. This positioning highlights Okta's significant presence and competitive edge within the software industry.
Conclusion
In summary, Okta Inc's recent stock performance reflects a positive market sentiment, buoyed by its growth prospects and modest undervaluation relative to the GF Value. While profitability remains an area for improvement, the company's growth metrics and industry rankings paint a promising picture. The commitment of major shareholders and Okta's competitive market cap further solidify its standing in the software sector. Investors and market watchers will undoubtedly keep a close eye on Okta as it continues to navigate the dynamic landscape of cloud security and identity management.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
