Okta (OKTA) Q1 Earnings Report Preview: What To Look For

Adam Hejl /
2022/06/01 8:49 am EDT
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Identity management software maker Okta (OKTA) will be reporting results tomorrow after market hours. Here's what you need to know.

Last quarter Okta reported revenues of $383 million, up 63.1% year on year, beating analyst revenue expectations by 6.45%. It was a very strong quarter for the company, with an exceptional revenue growth and a solid beat of analyst estimates.

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 54.8% year on year to $388.7 million, improving on the 37.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.34 per share.

Okta Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing three downward revisions over the last thirty days. 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 6.62%.

Looking at Okta's peers in the cybersecurity segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. SailPoint delivered top-line growth of 27.1% year on year, beating analyst estimates by 3.2% and ForgeRock reported revenues up 13.4% year on year, exceeding estimates by 3.35%. Both companies (SailPoint and ForgeRock) traded flat on the results. Read our full analysis of SailPoint's results here and ForgeRock's results here.

Tech stocks have been facing declining investor sentiment in 2022 and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 10.2% over the last month. Okta is down 29.2% during the same time, and is heading into the earnings with analyst price target of $189.8, compared to share price of $84.42.

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.

The author has no position in any of the stocks mentioned.