Okta (OKTA) Stock Forecast & Price Target

Okta's strong growth in emerging product areas such as Identity Governance, Privileged Access, and Identity Threat Protection, along with the robust performance of the Customer Identity Cloud, positions the company well for continued momentum into the latter half of 2026. The company's ability to expand its total addressable market beyond that of traditional vendors, alongside solid profitability metrics like an operating margin of 26.7% and free cash flow of $238 million, highlights its financial strength. Furthermore, the customer remaining performance obligation (cRPO) growing by 14%, surpassing guidance, indicates strong demand that could lead to upside in revenue and margins, reinforcing a positive outlook for Okta's future performance.

Okta's financial outlook appears negative due to expectations of slower revenue growth, specifically a forecasted reduction of 250 basis points for CY/25-26E, which could be attributed to declining tech spending and challenges in acquiring new customers and retaining existing ones. This anticipated slowdown in performance is expected to lead to a less attractive growth and margin profile, resulting in a lower valuation multiple compared to peers. Furthermore, management has indicated broad-based concerns among customers regarding macroeconomic conditions, suggesting immediate impacts on revenue projections, particularly in sectors affected by tariffs and federal contracts.