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Jim Cramer - Mad MoneyOkta, Inc.OKTAWEAK BUYMay 21, 2021

It reports next week and is worth buying, but buy only if you believe the market will change its attitude towards high-flying growth names that don't trade on earnings, but sales.

Jim Cramer - Mad Money

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$238.23

Stock price when the opinion was issued

$118.72

As of Jun 05, 2026. Market Open.

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DON'T BUY

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.

BUY ON WEAKNESS

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.

PAST TOP PICK

(A Top Pick Jan 29/25, Down 11%)

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.

(Analysts’ price target is $115.00)

PARTIAL BUY

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.

TOP PICK

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.

(Analysts’ price target is $103.03)

WAIT

Estimated earnings will be at end of August.

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.

COMMENT

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.

PARTIAL BUY

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.

DON'T BUY

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.

DON'T BUY

They report Wednesday. They may have a very difficult quarter. They will have to announce layoffs.

PAST TOP PICK

(A Top Pick Oct 18/21, Down 75%) He sold in February/March after holding for 4 to 5 months. It had some company specific problems including a security breach even though it is cyber security company. Because of attrition in sales it is having difficulty keeping some of its sales people. Non-profitable tech got hit hard this year.

HOLD

Cybersecurity. Leader in identity access management. Reported last week, top and bottom lines were strong. Problem was tepid guidance for Q3 regarding integration of an acquisition. Negatives are operational, not about the business. (Analysts’ price target is $108.00)

BUY ON WEAKNESS

This cybersecurity stock has hung on during this harsh tech sell-off. OKTA has plunged 74% from last year's peak. Offers great revenue growth. Has rebounded since the trough mid-last month, helped by a clean quarterly beat last week. The PE is much more reasonable.

COMMENT

It reports Wednesday and he's unsure because there's been a lot of turnover there. He wants to know what's happening there.

BUY

With the rise of home offices, home computers are vulnerable to hackers. In offices, those computers are protected behind an office firewall, but home is more vulnerable. Okta protects. They handle anything to do with log-ins and credentials. This stock has rallied from $247 to 266 a month ago. This faces little competition in the online identity business.

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