Okta, Inc. (OKTA)

They report Wednesday. Is confident about the CEO, but doesn't think it matters in a market which thinks that anything Okta can do that a chatbot can do better.

Cybersecurity is too important for companies to make their own AI replacements. 2026 earnings growth is only 7% but trades at only 23x PE. Worth nibbling at.

With all the AI agents coming on, now you have to figure out how you're going to authenticate a machine. A leader, lots of talk about this issue, but hasn't come out with a product yet. If you believe that Okta can pull this off, it'll be a big deal.

You could take a small position, with the expectation they will come out with an authentication machine.

Claim to fame is it's one of the leaders in identity and access management. Cloud-based software solution. Allows developers to build ID controls into apps and websites. 12-month target of $102.25. Buy here around $90, at $86.25, and shouldn't go below $80.

Referring to the dartboard chart from the top of the show, this one's in the second ring of IAM -- identity and access management. Leader in that space for 8 years in a row. King of the double authentication. 

Pretty high-margin business. Just achieved GAAP profitability, making $$ that they can actually bank. Focus this year will be on profit-margin expansion. 12-month target of $105. Buy 1/3 here around $92, low $90s, and mid-$80s. No dividend.

Privacy breach. Has to earn back respect from the marketplace, because a lot of people got burned. 12-month price target of $118. Wait for earnings to come out and see if it can repair damage to its integrity.

Reported two weeks ago: great numbers with a clean beat and raised their quarter. Shares popped and can continue to rise, but a recent major hack involved cracking a company network by breaking into an employee's Okta logging credentials.

Has been following company closely.
Identity verification a good space to be in.
Heavy competition from Microsoft etc.
Potential for company to be bought.
"Show and prove" story for investors.
Waiting for results before buying.

Delivered a beat and raised guidance, but the street focussed on the amount of business they have not done, a number which missed expectations. The street sees slowing business ahead. Doesn't help that shares were hot going into the quarter.