By Sam Boughedda
Stifel lifted Okta (NASDAQ:OKTA) to Buy from Hold, raising the price target to $90 from $60 per share on Monday, as the firm's survey "suggests happy customers."
Analysts told investors in a note that the firm surveyed 37 current Okta customers (80% spend >$100K annually with Okta, 43% have >$1 billion in revenue, 51% are both Workforce/CIAM customers).
"Overall, survey results reveal generally happy customers who support Okta's broader identity swim-lane convergence strategy and are interested in Okta's emerging IGA/PAM opportunities," the analysts wrote.
Even so, the analysts acknowledged that the firm's Buy call may be early, as they think Okta still has a lot of work to do across the go-to-market front. Meanwhile, they state that the IAM landscape remains highly competitive, Okta's C4Q22 VAR checks were disappointing, and "investor sentiment on Okta remains more mixed given CY22 breaches and uneven results."
"However, at 4.8x CY24E EV/rev, we believe all of this creates a positive set-up and risk/reward as Okta steadies execution against already de-risked CY23 top-line guidance and delivers significant operating/FCF margin improvements in coming years," the analysts conclude.