Okta Inc (NASDAQ:OKTA) stock rose 0.88% (As on December 17, 11:19:09 AM UTC-4, Source: Google Finance) after Jefferies upgraded the company to Buy from Hold with a price target of $125, up from $90, as part of its 2026 software outlook. Okta has a “significant opportunity” as it attempts to build out a complete identity platform and capture growing agentic demand, the firm tells investors in a research note.
The research firm cited a significant value dislocation at 4x EV/CY27 revenue as a key factor in its upgraded outlook for the identity and access management company. This assessment appears reasonable considering Okta maintains impressive gross profit margins of 77.08% and has delivered 12.12% revenue growth over the last twelve months. Jefferies identified several fundamental catalysts for fiscal year 2027, including improved execution, secular Agentic tailwinds, and potential for positive estimate revisions that could drive upside to consensus revenue growth expectations of 9% year-over-year.
The new $125 price target represents a multiple of 6x EV/CY27 revenue, which Jefferies considers reasonable compared to its coverage average of 7.4x and mid-cap average of 5.2x. The upgrade comes as Jefferies believes these catalysts should contribute to several percentage points of upside beyond current market expectations for Okta’s growth trajectory.
In other recent news, Okta, Inc reported third-quarter results that exceeded expectations, with Truist Securities noting the company’s performance surpassed the high end of its guided ranges and consensus estimates. The company’s current remaining performance obligations (CRPO) showed a year-over-year growth of 13%, surpassing its own guidance of 10% growth, as highlighted by DA Davidson. RPO, or subscription backlog, was $4.292 billion, an increase of 17% year-over-year. cRPO, which represents subscription backlog expected to be recognized over the next 12 months, was $2.328 billion, up 13% compared to the third quarter of fiscal 2025. Non-GAAP net income was $152 million, compared to non-GAAP net income of $121 million in the third quarter of fiscal 2025. Cash, cash equivalents, and short-term investments were $2.463 billion at October 31, 2025. During the quarter, the Company settled the remaining principal amount of the 2025 Notes for $510 million in cash. Free cash flow was $211 million, or 28% of total revenue, compared to $154 million, or 23% of total revenue, in the third quarter of fiscal 2025.
For the upcoming fourth quarter, Okta has guided for CRPO growth of approximately 9% year-over-year, aligning with market expectations. UBS described Okta’s third-quarter results as “slightly better than expected,” with growth stabilizing at 13%.