Kim BoltonOkta, Inc.OKTAPARTIAL BUYFeb 26, 2025

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.

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.