Okta (OKTA 57.13, +3.38, +6.29%) is another tech name that is bouncing back today.
Every day, workers use Okta to securely access a wide range of company assets,
including cloud applications, websites, mobile apps, and services from a
multitude of devices. Each of these users represents a unique user ID that
authenticates into Okta's platform. Companies also use the Okta platform to
provide their customers with more modern experiences online, including via
As the corporate perimeter has dissolved, identity has become the most reliable way to manage user access, adopt cloud and mobile technologies, and protect digital assets. As a result, identity is quickly becoming the most critical layer of a company's security. Its approach to identity eliminates duplicative, sprawling credentials and disparate authentication policies, allowing customers to simplify their IT security infrastructures. The Okta Identity Cloud allows customers to provision their customers, employees, contractors, and partners, enabling any user to connect to any device, cloud, or application, all with a simple sign-on.
In early December, Okta reported solid Q3 (Oct) results as its non-GAAP loss of $(0.04) per share was much better than prior guidance of $(0.12)-(0.11). Revenue rose 57.8% yr/yr to $105.6 mln, which also was well above prior guidance of $96-97 mln. And the guidance for Q4 (Jan) was also well ahead of market expectations.
Okta also closed a number of significant deals in the quarter. For example, Hertz chose Okta to securely connect all of its employees to the hundreds of applications they use to run their business. Also, an international financial services company with over 750,000 members was a new customer identity and workforce identity win for Okta in the quarter. A noteworthy up-sell in the quarter was the US Dept of State.
In sum, after a strong move in 1H18, the stock has fallen into a trading range in 2H18 in the $50-70 area. It's back at the lower end of that trading range currently which makes it somewhat interesting. Okta has been posting solid earnings results even though it's not yet profitable. But it seems to be heading in that direction. Okta is really doing a good job at winning larger accounts, so that's good to see.
On a final note, Okta is really a play on companies moving to the cloud and their need for identity management. Okta sees a lot of room for growth as its market is still in the early stages of development.
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