Okta Stock Surges 15% After Beat-and-raise, Results ‘Strong’ Against a ‘Wall of Worry’ Says Analyst By Investing.com

By Senad Karaahmetovic

Shares of Okta (NASDAQ:) are up over 15% in pre-market Friday after the company reported better-than-expected Q1 earnings and hiked its full-year outlook.

The company a first-quarter adjusted loss per share of 27c, compared to a 10c loss per share in the year-ago period and the estimated loss per share of 33c. The Q1 revenue came in at $414.9 million, up 65% YoY and above the consensus projection of $388.9 million.

The company expects a Q2 loss per share in the range of 31c to 32c, compared to the expectations of a loss per share of 32c. Revenue is expected to range between $428 million and $430 million in the second quarter, while analysts were looking for $422.8 million.

For the full fiscal year, Okta expects revenue in the range of $1.81 billion to $1.82 billion, up from $1.78 billion to $1.79 billion, while analysts were estimating $1.78 billion. OKTA anticipates FY adjusted loss per share in the range of $1.11 to $1.14, compared to the previous forecast range of a loss per share of $1.24 to $1.27, while analysts were expecting a loss per share of $1.25.

Morgan Stanley analyst Hamza Fodderwala said the Q1 quarter was a “clearing event” for OKTA shares.

“FQ1 delivered a strong result against a “wall of worry” related to macro, competition and potential negative impact post the “breach” in March. With strong pipeline unaffected by recent events and estimates moving higher, we see FQ1 as a clearing event for the stock re-rating at ~6.5X CY23 revs,” the analyst told clients.

Similarly, RBC analyst Matthew Hedberg said OKTA delivered strong results “despite negative investor sentiment and should largely put the security incident to bed.”

“The good news is that after much analysis and discussion with customers, management was unable to point to any material impact to business, which we think largely puts the security incident to bed and removes an overhang from the stock. Beyond this, the quarter displayed a continuation of strength in new customer additions, DBNRR/up-sell and traction with large, enterprise customers,” Hedberg said in a client note.