What Happened?
Shares of identity management company Okta (NASDAQ:OKTA) jumped 3.6% in the afternoon session after it reported third-quarter financial results that beat analyst expectations and issued an upbeat forecast for the fourth quarter. Okta's total revenue for the quarter reached $742 million, an 11.6% increase from the prior year, surpassing the consensus forecast of $730 million. The identity-management firm also posted adjusted earnings of $0.82 per share, which was better than the anticipated $0.76. Looking ahead, Okta guided for fourth-quarter revenue of around $749 million, exceeding analysts' projections. The company also raised its full-year guidance for adjusted earnings per share.
After the initial pop the shares cooled down to $86.26, up 4.8% from previous close.
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What Is The Market Telling Us
Okta’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 22.6% on the news that the company delivered a solid fourth quarter earnings, beating Wall Street's expectations on both revenue and operating profit. A standout metric was the 25% year-on-year growth in remaining performance obligations (RPO), which exceeded analysts' estimates, and implied solid future sales as customers lock in long-term commitments. Sales were up 13% from last year, with nearly all of it coming from subscriptions. Margins also improved meaningfully, driven by tight cost controls and stronger revenue. That helped earnings per share come in ahead of estimates, showing the company's ability to turn sales into profit. Looking ahead, full-year sales guidance topped Wall Street forecasts, though expected sales growth of 9-10% signals some slowdown compared to this year. Overall, this was a strong quarter.
Okta is up 9.4% since the beginning of the year, but at $86.26 per share, it is still trading 32.2% below its 52-week high of $127.30 from May 2025. Investors who bought $1,000 worth of Okta’s shares 5 years ago would now be looking at an investment worth $355.93.
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