Okta - Okta, Inc. (OKTA) Stock Price, News, Quote & History - Yahoo Finance
Good point well made
Is the main competitor 1password?
I read recently that two couples launched 1password that offers 1 password to rule them all . And 14 years later, they just raised their 1st venture capital round: a shocking $200M:
I used google to find out and this is what I got:
Though it may be biased, since it’s from Forrester: The Future Of Identity And Access Management
I always find it interesting to learn about why other people choose to invest in companies, so I thought I would share my justification to buy into Okta.
My overall strategy
I invest in tech and consumer companies because these are sectors that I understand well enough to be confident in my decisions. I generally look for companies that are likely to grow and my approach is to buy and hold. I have a relatively high appetite for risk.
Triggers to investigate Okta
- We have used them at work for single sign-on for about a year now. This is how I first heard about them.
- I noticed that the stock performance has been excellent: +100% in the last year, +350% in the last three years.
- Price is $129 - my portfolio is modest so if I buy a $1,000+ share it will make it very unbalanced. When fractional shares are introduced on Freetrade, this will not be a problem. For now, this price will allow me to buy a small initial holding.
Reasons to buy
- Strong previous performance as noted above (I know this isn’t an indictor of future performance, but it’s a better sign than a long-term decline).
- Strong history of revenue growth and forecast to continue.
- I know the problem they are trying to solve is endemic. I do consulting work with large corporations and they all have a large and growing number of SaaS products in their organisation, all of which have different logins.
- Their product is good for users of business applications (because they don’t have to remember many different usernames and passwords) and good for corporate IT (more secure, more control).
- They will be perceived as a neutral vendor by organisations because they are just doing identity. Microsoft - a competitor with Active Directory - also has Office, etc. so if you use them to manage single sign-on then you are just tying yourself into their ecosystem more.
- On Stratechery, there are a few articles covering their strategy which back this up, including an interview with the CEO:
We provide the identity cloud and it’s our platform. And it’s the first and only independent and neutral cloud platform for identity and you know that’s a lot of words in there. I think the most important word there is independent. And by independent, what I mean is, in previous generations of technology, identity was always sewn in in part of another platform. Whether you see Active Directory for Windows networks or Oracle Identity really being part of the Oracle Application Platform. Or even you can even think of the Apple identity is part of the Apple ecosystem. So, we’re the first one to kind of make identity its own platform.
- They are a leader in this field, as @engineer noted above.
Reasons to avoid
- They are losing money. However, as their S-1 filing explains, the contributing margin of any customer changes dramatically over time. As they are growing, you would expect them to be losing money before these customers start paying for themselves:
- Fairly close to their record high price, so risk that it could only go down from here.
Simply Wall St assessment is that it is overpriced:
Next steps for me
- Buy one or two shares initially.
- Their next earnings are released on Dec 5th, so I will wait until then in case there are any nasty surprises.
Earnings just came out and shares are down over 4% after hours:
Press release: https://investor.okta.com/news-releases/news-release-details/okta-announces-strong-third-quarter-financial-results
Investor presentation: https://investor.okta.com/static-files/129354ed-4045-484e-8bfc-44a7113fc242
Surprised by this. Especially since earnings beat market. I sold out at 5% profit in November after buying in August. Maybe time to buy back again.
I bought at 132$ and still waiting.
They just beat earnings, and their shares are slightly up despite it being a red day for the markets.
@Phil How difficult would it be to move away from Okta? How sticky is the product?
Q1 earnings expected this week! I wouldn’t be surprised if we see a small sell off, but I’ll be holding this stock for a while.
I made a post about the same today
It’s been one of my best performers over this Covid crisis. Currently up at all time highs. Whether it sells off or not depends on how earnings compare to the estimates. If we get a beat they might go up
Management said it expected revenue to grow 37% to 38% year over year during fiscal Q1. The current situation could provide a headwind to growth. But I don’t know of course. Capital at risk.
Somethings been going on for the last 2 days.
Volumes up ahead of their earnings announcements but the price has fallen each day despite expecations of better than expected results.
and from the CEO of OKTA
Okta Announces First Quarter Fiscal Year 2023 Financial Results
June 2, 2022
Q1 revenue grew 65% year-over-year; subscription revenue grew 66% year-over-year
Remaining performance obligations (RPO) grew 43% year-over-year to $2.71 billion; current remaining performance obligations (cRPO) grew 57% year-over-year to $1.41 billion
SAN FRANCISCO–(BUSINESS WIRE)–Jun. 2, 2022-- Okta, Inc. (Nasdaq: OKTA), the leading independent identity provider, today announced financial results for its first quarter ended April 30, 2022.
“We delivered solid first quarter results highlighted by strength in new customer additions, dollar-based net retention rate, and the success we’re having with large customers as they continue their journey to the cloud,” said Todd McKinnon, Chief Executive Officer and co-founder of Okta. “Organizations around the world have made it clear that identity is the foundation for their digital transformation projects and zero trust security environments. Okta is the recognized leader in identity and we’re confident in our ability to capture more of the massive market opportunity.”
First Quarter Fiscal 2023 Financial Highlights:
Revenue: Total revenue was $415 million, an increase of 65% year-over-year. Subscription revenue was $398 million, an increase of 66% year-over-year. On an Okta standalone basis (excluding $66 million attributable to Auth0), total revenue grew 39%.
Remaining Performance Obligations (RPO): RPO, or subscription backlog, was $2.71 billion, an increase of 43% year-over-year. cRPO, which is contracted subscription revenue expected to be recognized over the next 12 months, was $1.41 billion, up 57% compared to the first quarter of fiscal 2022.
Calculated Billings: Total calculated billings was $389 million, an increase of 7% year-over-year. Calculated billings includes the effect of billings process improvements that were enacted at the end of the first quarter of fiscal 2022. Calculated billings increased 52% when viewed on a like-for-like basis, which includes the full effect of the billings process improvements in the first quarter of fiscal 2022.
GAAP Operating Loss: GAAP operating loss was $240 million, or 58% of total revenue, compared to a GAAP operating loss of $91 million, or 36% of total revenue, in the first quarter of fiscal 2022.
Non-GAAP Operating Loss: Non-GAAP operating loss was $41 million, or 10% of total revenue, compared to non-GAAP operating loss of $16 million, or 6% of total revenue, in the first quarter of fiscal 2022.
GAAP Net Loss: GAAP net loss was $243 million, compared to a GAAP net loss of $109 million in the first quarter of fiscal 2022. GAAP net loss per share was $1.56, compared to a GAAP net loss per share of $0.83 in the first quarter of fiscal 2022.
Non-GAAP Net Loss: Non-GAAP net loss was $43 million, compared to non-GAAP net loss of $13 million in the first quarter of fiscal 2022. Non-GAAP basic and diluted net loss per share was $0.27, compared to non-GAAP basic and diluted net loss per share of $0.10 in the first quarter of fiscal 2022.
Cash Flow: Net cash provided by operations was $19 million, or 5% of total revenue, compared to net cash provided by operations of $56 million, or 22% of total revenue, in the first quarter of fiscal 2022. Free cash flow was $11 million, or 3% of total revenue, compared to $53 million, or 21% of total revenue, in the first quarter of fiscal 2022.
Cash, cash equivalents, and short-term investments were $2.49 billion at April 30, 2022.
The section titled “Non-GAAP Financial Measures” below contains a description of the non-GAAP financial measures, and reconciliations between GAAP and non-GAAP information are contained in the tables below.
For the second quarter of fiscal 2023, the Company expects:
Total revenue of $428 million to $430 million, representing a growth rate of 36% year-over-year;
Current RPO of $1.48 billion to $1.49 billion, representing a growth rate of 35% to 36% year-over-year;
Non-GAAP operating loss of $44 million to $43 million; and
Non-GAAP net loss per share of $0.32 to $0.31, assuming weighted-average shares outstanding of approximately 156 million.
For the full year fiscal 2023, the Company now expects:
Total revenue of $1.805 billion to $1.815 billion, representing a growth rate of 39% to 40% year-over-year;
Non-GAAP operating loss of $167 million to $162 million; and
Non-GAAP net loss per share of $1.14 to $1.11, assuming weighted-average shares outstanding of approximately 157 millio