Okta Stock (NASDAQ:OKTA)
Okta (NASDAQ:OKTA) stock jumped by 6% in Thursday’s premarket trade after the identity management business said it would lay off 5% of its personnel. This news followed an upgrade of Okta stock by investment firm Needham.
Needham analyst Alex Henderson upgraded Okta stock from hold to buy and set a price objective of $90 per share. The business has corrected the concerns brought on by the Auth0 acquisition and problems with enterprise sales.
Because it was established before the effects of the corrections were apparent, Henderson said in a letter to clients that growth of 16% to 17% year 2024 was readily achievable.
He also said that the Customer business, which accounts for 45% of total revenue and is expanding at a rate of 30% to 35%, should be enough to enable the firm to fulfill its fiscal 2024 projection. There will be space for “increasing profitability and margins” if the Workforce business is included, which is “solidly to growth.”
Henderson said the company needed help incorporating Auth0 into its customer identification and access management (CIAM) solutions because of significant turnover. Still, that problem now seems to have been resolved.
“Our fieldwork indicates the Customer-facing business is working well and expanding quickly,” Henderson said.
Okta is nearing FedRamp High status, which the analyst says would “open enormous commercial possibilities” and contribute to a 20% year-over-year increase in federal security expenditure in 2023 and continued strength into fiscal 2024.
Henderson speculated that Okta stock would be “strongly positioned” for big transactions with the DoD since it had received IL4 authorization from the Department of Defense in May 2022.
On the same day, Okta said that it would lay off 300 full-time employees, or about 5% of its staff, resulting in a $15M restructuring charge to be made in the fourth quarter of fiscal 2023.
Oppenheimer raised their rating on Okta stock earlier this week, citing a study showing “mostly pleased clients.”
Featured Image: Freepik
Author Shariq Khan 
