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Okta (OKTA) Dips More Than Broader Markets: What You Should Know

Okta (OKTA) closed at $69.24 in the latest trading session, marking a -0.92% move from the prior day. This change lagged the S&P 500's daily loss of 0.38%. Meanwhile, the Dow lost 0.68%, and the Nasdaq, a tech-heavy index, lost 10.47%.

Prior to today's trading, shares of the cloud identity management company had lost 14.95% over the past month. This has lagged the Computer and Technology sector's loss of 1.96% and the S&P 500's gain of 2.61% in that time.

Investors will be hoping for strength from Okta as it approaches its next earnings release. The company is expected to report EPS of $0.12, up 144.44% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $510.58 million, up 23.05% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.76 per share and revenue of $2.17 billion, which would represent changes of +2000% and +16.62%, respectively, from the prior year.

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Investors should also note any recent changes to analyst estimates for Okta. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.02% higher. Okta is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that Okta has a Forward P/E ratio of 91.71 right now. For comparison, its industry has an average Forward P/E of 23.7, which means Okta is trading at a premium to the group.

It is also worth noting that OKTA currently has a PEG ratio of 3.67. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OKTA's industry had an average PEG ratio of 3.67 as of yesterday's close.

The Internet - Software and Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 112, putting it in the top 45% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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Okta, Inc. (OKTA) : Free Stock Analysis Report

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