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Okta (OKTA) Rises But Trails Market: What Investors Should Know

Okta (OKTA) closed at $82.30 in the latest trading session, marking a +1.38% move from the prior day. This change lagged the S&P 500's 2.11% gain on the day. Meanwhile, the Dow gained 1.18%, and the Nasdaq, a tech-heavy index, added 2.96%.

The cloud identity management company's stock has dropped by 4.56% in the past month, falling short of the Computer and Technology sector's gain of 1.69% and the S&P 500's gain of 3.08%.

Analysts and investors alike will be keeping a close eye on the performance of Okta in its upcoming earnings disclosure. The company's earnings report is set to go public on February 28, 2024. The company is expected to report EPS of $0.51, up 70% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $586.25 million, showing a 14.95% escalation compared to the year-ago quarter.

It is also important to note the recent changes to analyst estimates for Okta. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

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Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Okta is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, Okta is holding a Forward P/E ratio of 41.22. This signifies a premium in comparison to the average Forward P/E of 24.65 for its industry.

It's also important to note that OKTA currently trades at a PEG ratio of 1.07. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Internet - Software and Services industry held an average PEG ratio of 0.97.

The Internet - Software and Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 105, which puts it in the top 42% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. 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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