Mizuho reiterates Outperform rating on Okta stock with $120 price target

Okta, Inc. (OKTA) reported a robust fiscal second quarter, exceeding Wall Street expectations with revenue up 13% year-over-year to $728 million and current remaining performance obligations (cRPO) growing 13.5%, surpassing consensus. This strong performance, attributed to solid execution and public sector activity, led Mizuho to maintain its Outperform rating and $120 price target, citing attractive valuation and an improved outlook, while RBC Capital also raised its target. However, BofA Securities maintained an Underperform rating with a $75 price target, highlighting persistent competitive concerns despite Okta's positive results and revised guidance.

Analysis

Okta, Inc. delivered a robust fiscal second-quarter performance, significantly surpassing Wall Street expectations on key metrics. The company reported revenue of approximately $728 million, a 13% year-over-year increase that beat the $711.6 million consensus, and a non-GAAP EPS of $0.93, exceeding the $0.84 estimate. A critical forward-looking indicator, current remaining performance obligations (cRPO), grew 13.5% year-over-year, well ahead of the anticipated 10.5%, signaling strong future revenue visibility. This outperformance is attributed to solid execution, improved public sector activity, and early success from a new go-to-market strategy. Consequently, management raised its full-year outlook and removed a layer of conservatism from its guidance. Analyst sentiment is largely positive, with 41 analysts revising earnings upwards and firms like Mizuho and RBC Capital reiterating Outperform ratings; Mizuho maintained its $120 price target, citing an attractive valuation at less than 5 times calendar year 2026 estimated revenue, while RBC raised its target to $115. However, a note of caution persists from BofA Securities, which maintained an Underperform rating and a $75 price target due to ongoing competitive concerns.

Key Decisions for Investors

• Investors should view the strong beat on revenue, EPS, and especially cRPO, coupled with a raised full-year outlook, as a signal of accelerating operational momentum that could support a bullish stance.
• The valuation argument from Mizuho, which frames the stock as attractive at less than 5x calendar year 2026 estimated revenue, presents a key data point for assessing a potential entry or addition to a position.
• Despite the positive quarter, the persistent Underperform rating from BofA Securities highlights that competitive pressures remain a material risk, warranting close monitoring of the competitive landscape.
• Future reports on cRPO growth will be a critical indicator to validate whether the current strength is a sustainable trend or a temporary inflection point.