Okta (OKTA) Stock Forecast & Price Target

Okta demonstrated strong financial performance in its recent results, with contractually remaining performance obligations (cRPO) of $2.328 billion growing by 12.9% year-over-year, and revenue performance obligations (RPO) of $4.292 billion increasing by 17.3% year-over-year, both exceeding consensus expectations. The firm is also implementing strategic workforce enhancements, including an increase in sales headcount for the first time in years, which management believes will further drive sales productivity improvements and enhance overall business momentum. Additionally, Okta's guidance for a free cash flow (FCF) margin of 29% for FY26, reflecting a year-over-year increase from 28.0% in FY25, suggests a positive trend in financial health and operational efficiency.

Okta is currently exhibiting signs of slower growth, with its F4Q current remaining performance obligation (cRPO) guidance reflecting only a 9% year-over-year increase, which falls short of consensus expectations. The company's reliance on subscription-based offerings for large enterprises, coupled with the potential for economic downturns and heightened competition, may contribute to volatility in deal closures and sales performance. Additionally, the past over-hiring that led to elevated attrition rates, alongside concerns about reputational risk stemming from customer security breaches, further complicates Okta's operational stability and long-term outlook.