TLDR
- BMO elevated Okta (OKTA) to Outperform from Market Perform and increased its price target to $97
- Bernstein boosted its price target to $134 from $129 while maintaining its Outperform rating
- Fourth-quarter FY2026 subscription revenue expanded 11.5% year-over-year, surpassing guidance midpoint by $12 million
- Platform deals represented 30% of Q4 bookings, a significant jump from the 10–15% range in previous quarters
- Several other Wall Street analysts modified their price targets, with projections spanning from $80 to $134
Okta experienced notable activity on Friday as a pair of analyst upgrades and target price adjustments arrived before the opening bell, pushing shares modestly higher in morning trading.
BMO’s Keith Bachman elevated Okta to Outperform from Market Perform while simultaneously raising his price target to $97. Bachman highlighted the critical role identity management will play as AI agents become more prevalent.
“We believe identity management is critical for agent adoption, and we think Okta will be one of the companies that nurtures, and benefits from, agent growth,” Bachman wrote.
Bachman further emphasized that Okta’s Identity Governance offering possesses substantial growth potential ahead. BMO’s analysis suggests Okta has a solid opportunity to achieve flat to slightly improved subscription revenue growth in fiscal 2027 versus fiscal 2026.
Meanwhile, Bernstein increased its price target on Okta to $134 from $129 while reaffirming its Outperform rating. The firm cited the company’s fourth-quarter FY2026 performance as justification.
Okta reported subscription revenue growth of 11.5% year-over-year in the fourth quarter, an acceleration from the 11.2% growth rate recorded in the previous quarter. The result exceeded the company’s own guidance midpoint by $12 million.
What Drove the Q4 Beat
Bernstein identified three key factors behind the robust performance. First, accelerating momentum in new customer acquisition combined with minimal churn rates. Second, sustained demand across Okta’s comprehensive platform offerings. Third, the company moving past challenges related to oversized three-year deals signed during the pandemic era.
One metric particularly caught attention. Platform deals constituted 30% of fourth-quarter bookings, a substantial increase from the 10–15% range observed in recent quarters. This development is significant as it indicates customers are embracing more comprehensive solutions from Okta’s product portfolio rather than limiting purchases to core offerings.
Bernstein also highlighted that these positive results materialized despite challenges from U.S. federal government budget cuts associated with DOGE initiatives. These headwinds potentially impacted Okta by approximately $30 million in annual recurring revenue during the third quarter.
Okta maintains a gross profit margin of 77%, while its PEG ratio stands at 0.03, which InvestingPro characterizes as undervalued.
Where Other Analysts Stand
Not every analyst reaction to Okta’s latest quarterly performance showed equal enthusiasm.
D.A. Davidson maintained a Buy rating paired with a $110 price target. Needham preserved its Buy rating but reduced its target to $90, pointing to management’s conservative forward guidance. Stephens decreased its target to $95 while retaining an Overweight rating.
Scotiabank reduced its target to $80 while keeping a Sector Perform rating intact. Wolfe Research lowered its target to $90 but maintained an Outperform rating.
For fiscal 2027, Okta provided guidance indicating approximately 10% subscription revenue growth year-over-year, marginally above Wall Street consensus but still perceived as conservative by several analysts.
