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Okta - AI Stock Analysis

Analysis generated May 27, 2025

Okta, Inc. (OKTA) is a leading provider in the identity and access management sector, helping organizations securely manage user authentication into apps, and for developers to build identity controls into applications, websites, web services, and devices. Through its advanced technology, Okta ensures the security and reliability of its identity services, helping companies manage and protect their digital assets and infrastructure.

Fundamental Analysis

Okta's revenue for the last quarter was $682 million, reflecting a growth of 2.56% compared to the previous quarter and 12.73% on a year-over-year basis. This steady revenue growth is a positive indicator of the company's ability to expand its customer base and enhance its service offerings.

The net income for the last quarter stood at $23 million. This represents a remarkable increase of 43.75% quarter-over-quarter and a significant year-over-year growth of 152.27%. This substantial improvement in net income underscores Okta's efficiency in managing its operations and cutting costs to drive profitability.

EBITDA for the last quarter came in at $43 million, a massive 368.75% increase quarter-over-quarter and 286.96% year-over-year. This substantial leap in earnings before interest, taxes, depreciation, and amortization highlights the company's operational efficiency and positive cash flows from its core business activities.

However, the current Price-to-Earnings (P/E) ratio of 2062 is exceptionally high. While this high P/E ratio signals strong future growth expectations, it may also indicate that Okta's stock is overvalued, presenting a bearish outlook to some investors.

Additionally, recent insider selling of Okta stock may be perceived as a bearish signal, suggesting that those closest to the company might believe the stock is currently overvalued.

Technical Analysis

As of today, Okta's stock price stands at $125.50. Over the past month, the stock has risen by 21.40%, and over the past year, it has increased by 30.53%, indicating strong short-term and long-term upward trends.

Despite this, the trend is currently bearish. The Simple Moving Average (SMA) for 10 days is 124.56, slightly lower than the previous SMA of 124.74, which suggests a potential downward movement in the stock price.

Additionally, the Relative Strength Index (RSI) is at 26.1, indicating that the stock may be oversold. A low RSI typically suggests a bullish condition, as it could point to a potential buy opportunity.

Alternative Data Analysis

Okta has 493 open job positions, representing a 27% increase in the past couple of months. This indicates that the company is in a growth and expansion phase, which is generally a healthy sign.

Employee sentiment at Okta is neutral. This neutrality may reflect stability but does not highlight any significant upward momentum in employee morale or culture.

In terms of customer acquisition, Okta’s website has seen an estimated 145 million visitors. However, the number of visitors has decreased by 17% in the last couple of months, a concerning trend that could imply a loss of potential customers or engagement.

On social media, Okta has gained traction on Instagram, boasting a 7% increase in followers, totaling 5,600 followers. This uptick could reflect growing interest and engagement with the company. Conversely, Okta has 42,000 followers on Twitter, with no change in the past couple of months, suggesting a plateau in interest.

AltIndex's AI score for Okta is 56, which translates to a hold signal. This score reflects a culmination of various fundamental, technical, and alternative data analyses, suggesting a cautious approach to the stock.

Conclusion and Recommendation

In conclusion, Okta exhibits strong fundamental growth indicated by rising revenues, net income, and EBITDA. While the high P/E ratio and insider selling might raise concerns about potential overvaluation, the company's robust balance sheet and profitability metrics are reassuring. On the technical front, despite recent positive price movements, the bearish indicators from SMA and RSI suggest caution. The alternative data shows mixed signals with positive employment prospects but concerns over customer engagement metrics.

Given the overall analysis, the recommendation would be to approach Okta stock with a hold stance. Higher valuation caution paired with solid company fundamentals and mixed technical and alternative signals suggest that Okta should be monitored closely for future potential opportunities or risks.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.