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Wall Street analysts downgrade Okta as financial performance reflects the 'impact of recent high-profile breaches'

Published Nov 30, 2023 22:58
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Okta, Inc. (NASDAQ:OKTA) shares were downgraded by analysts at TD Cowen, Wells Fargo and KeyBanc in noted over the last couple of days following its latest earnings release.

Analysts at TD Cowen lowered the stock to Market Perform from Outperform, lowering the price target to $74 from $100 per share. The firm said OKTA's guidance indicates deceleration.

"We are downgrading OKTA to Market Perform from Outperform and lowering our price target to $74 from $100 following 3Q24 results that indicate a top-line deceleration heading into FY25 (FYE Jan '25)," said the analysts. "OKTA's financial performance is reflecting the impact of recent high-profile breaches involving the company's solutions, and we believe the stock remains range bound until cRPO growth can reaccelerate."

Analysts at Wells Fargo lowered its rating on the company to Equal Weight from Overweight, cutting the price target to $70 from $80 per share. "We believe Okta's focus on margin expansion at a critical time like this is an oversight. We believe the company should be more focused on driving revenue growth acceleration to assuage investor concerns regarding shares losses related to the breach," the firm stated.

At KeyBanc, OKTA was lowered to Sector Weight from Overweight, with no price target. The analysts stated: "We are downgrading OKTA to Sector Weight following a modest F3Q revenue and cRPO beat but a F4Q cRPO guide slightly below and a meaningful revenue guide below for FY25."

They added: "While we continue to view identity as a top priority within security and Okta as a potential long-term consolidator, given the mis-execution since the Auth0 acquisition and uncertainty on the duration and the degree to which the breach may have an impact going forward, we see risk/reward as balanced."

Wall Street analysts downgrade Okta as financial performance reflects the 'impact of recent high-profile breaches'
 

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