Identity management software maker Okta (OKTA) will be reporting earnings tomorrow afternoon. Here's what investors should know.
Last quarter Okta reported revenues of $556 million, up 23% year on year, beating analyst revenue expectations by 4.1%. It was a clean "beat and raise" quarter. It was good to see Okta beat analysts' revenue, non-GAAP operating profit, and EPS expectations this quarter. We were also glad that next quarter's revenue and non-GAAP operating profit guidance came in higher than Wall Street's estimates. Full year guidance was also raised across the board.
Is Okta buy or sell heading into the earnings? Read our full analysis here, it's free.
This quarter analysts are expecting Okta's revenue to grow 16.5% year on year to $560.4 million, slowing down from the 37.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.29 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 4.8%.
Looking at Okta's peers in the cybersecurity segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Zscaler delivered top-line growth of 39.7% year on year, beating analyst estimates by 4.9% and Tenable reported revenues up 15.3% year on year, exceeding estimates by 1.6%. Tenable was down 9.4% on the results, and Zscaler was down 6.8%.
Read our full analysis of Zscaler's results here and Tenable's results here.
There has been positive sentiment among investors in the cybersecurity segment, with the stocks up on average 11.9% over the last month. Okta is up 7.2% during the same time, and is heading into the earnings with analyst price target of $89.8, compared to share price of $70.5.
One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.
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The author has no position in any of the stocks mentioned.