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OKTA Gears Up to Report Q1 Earnings: What's in the Cards?

Okta, Inc. OKTA is set to report its first-quarter fiscal 2024 results on May 31.

For the fiscal first quarter, Okta anticipates non-GAAP earnings of 11-12 cents per share.

The Zacks Consensus Estimate for earnings has been unchanged at 12 cents per share in the past 30 days.

Revenues are expected to be $509-$511 million, indicating growth of around 23% from the year-ago period’s reported figure.

Okta, Inc. Price and EPS Surprise

 

Okta, Inc. Price and EPS Surprise
Okta, Inc. Price and EPS Surprise

Okta, Inc. price-eps-surprise | Okta, Inc. Quote

 

The Zacks Consensus Estimate for revenues is pegged at $510.58 million, indicating an increase of 23.05% from the year-ago quarter’s reported figure.

Okta’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average earnings surprise being 96.82%.

Let’s see how things have shaped up for Okta prior to this announcement.

Factors to Consider

The company’s first-quarter fiscal 2024 results are expected to reflect the benefits of increased use cases of identity solutions and an expanding product portfolio.

Okta is expected to have experienced strong demand for its Workforce and Customer Identity solutions. Continuous innovation in its solutions have helped Okta score notable enterprises such as Sonos, Hewlett Packard Enterprise, MassMutual and OpenAI. Its products’ ability to automate processes, secure data and reduce costs has been another positive.

Demand for the company’s solutions has been strong due to the deployment of cloud and hybrid IT, digital transformation projects and the adoption of Zero Trust security. The momentum is expected to have continued in the to-be-reported quarter.

These factors are expected to have expanded the customer base in the fiscal first quarter. In the fiscal fourth quarter, Okta added 550 customers, bringing the total customer count to 17,600, up 17% year over year. Customers with more than $100K in Annual Contract Value increased 27% year over year.

However, Okta is expected to have faced challenges in execution and heightened attrition. Challenging macro environment and unfavourable forex are potential headwinds. These factors are expected to have hurt its fiscal fourth-quarter prospects.

What Our Model Indicates

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Okta has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

JOYY YY has an Earnings ESP of +39.47% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

JOYY is likely to release its first-quarter 2023 results on May 30. YY shares have declined 10.7% year to date against the Zacks Computer & Technology sector’s rise of 31.4%.

Zscaler ZS currently has an Earnings ESP of +4.47% and a Zacks Rank #3.

ZS shares have gained 16.7% year to date. Zscaler is set to report its third-quarter 2023 results on Jun 1.

HP HPQ has an Earnings ESP of +2.24% and a Zacks Rank #3.

HPQ shares have gained 16.4% year to date. HP is set to report its second-quarter fiscal 2023 results on May 30.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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HP Inc. (HPQ) : Free Stock Analysis Report

JOYY Inc. Sponsored ADR (YY) : Free Stock Analysis Report

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

Zscaler, Inc. (ZS) : Free Stock Analysis Report

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