Okta's Q4 Results Show Potential Groundwork for Reacceleration, Morgan Stanley Says

MT Newswires Live00:08

Okta (OKTA) delivered fiscal Q4 results and guidance "generally in-line" with buy-side estimates and the ingredients for a re-acceleration may now be in place, Morgan Stanley said in a note Thursday.

"Did not get commitment on reacceleration, the catalyst for the stock, but did see the ingredients for it to occur during the year as new products gain traction," the note said.

The investment firm highlighted that Okta's new products represented about 30% of the company's Q4 bookings, but said it is surprised by higher opex investments in the coming fiscal year.

Morgan Stanley said that "combined with opex investments, quarter did not act as a meaningful catalyst, but remain encouraged by traction with new products."

Meanwhile, artificial intelligence agent products are becoming "increasingly central to customer conversations" and the company has a team of sales representatives working with clients and demoing Okta for AI Agents to collect feedback on product development and pricing, the note said.

Morgan Stanley kept Okta's overweight rating and lowered the price target to $101 from $110, citing the company's updated margin trajectory.

Price: 78.21, Change: +6.47, Percent Change: +9.02

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