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Okta falls 16% on “mixed” Q2 earnings and reduced forecast as analysts point out sales difficulties

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Representatives from $6.5 billion According to officials, the acquisition of Auth0 has not worked well with those at Okta, increasing employee churn.

Okta (NASDAQ:OKTA) 

After lowering its billings forecast for the remainder of the year, Okta (NASDAQ:OKTA) dropped its share price by more than 16% on Thursday. Analysts cited “integration problems” with its sales staff as the cause.

Both billings and unfulfilled performance commitments were “underwhelmed,” according to Gregg Moskowitz, a Mizuho analyst who rates Okta (OKTA) as a buy. He cited difficulties with sales integration between the core business and its Auth0 purchase.

In a note to clients, Moskowitz stated that Okta (OKTA) is the market leader “in the critically important identity/access management industry,” adding that “a retooled [go-to-market] approach could pay benefits, but will take time.”

Outlook

Following the news, Moskowitz decreased his price objective for Okta (OKTA) from $150 to $110 and lowered his revenue and earnings expectations for the company.

Okta (OKTA) analyst Matthew Hedberg of RBC Capital Markets said the second-quarter results were “decent,” but the third-quarter forecast and full-year guidance are now in line with or slightly higher than consensus. Hedberg has a neutral rating and a $145 price target on Okta (OKTA).

Okta (OKTA) stated that it anticipates total sales for fiscal 2023 to be between $1.812 and $1.82B, increasing between 39% and 40% from the previous year. Analysts anticipated $1.82 billion in sales for the entire year.

The current remaining performing obligations, according to Okta (OKTA), are anticipated to be between $1.54B and $1.55B, up between 30% and 31% from last year.

Okta (OKTA) stated that it anticipates sales for the third quarter to be between $463M and $465M, up between 32% and 33% year over year.

Featured Image – Megapixl © Michaelvi 

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