Okta (OKTA) Stock Forecast & Price Target

Okta demonstrates a positive financial outlook due to momentum in emerging product areas such as Identity Governance and Privileged Access, along with robust growth in the Customer Identity Cloud, which is expected to sustain strength through the second half of 2026. The company has significant potential to expand its Total Addressable Market (TAM) by targeting areas that legacy vendors cannot access and by consolidating the cloud-based identity spending landscape while simultaneously enhancing profitability. Additionally, Okta reported a compelling operational margin and free cash flow of 26.7% and $238 million, respectively, exceeding consensus expectations, and a 14% growth in current Remaining Performance Obligations (cRPO), further indicating strong revenue and margin growth prospects.

The analysis indicates a negative outlook for Okta's stock due to projected revenue and margin declines that could lead to a significant discount against peers, with an estimated EV/Sales multiple as low as 4x by 2026. A predicted slowdown in revenue growth of 250 basis points may be attributed to decreased tech spending, challenges in customer expansion, and lower renewal and expansion rates, which further supports the adverse outlook. Additionally, management has reported broad-based concerns in customer dialogues regarding macroeconomic conditions, suggesting an imminent impact on their financial performance, particularly in affected sectors.