Okta Stock Tumbles on ‘Underwhelming Results’, Analysts Concerned About Execution
2022.09.01 14:17
Okta (OKTA) Stock Tumbles on ‘Underwhelming Results’, Analysts Concerned About Execution
By Senad Karaahmetovic
Shares of Okta (NASDAQ:OKTA) are trading 14% lower in premarket Thursday despite the company’s reporting solid EPS and revenue numbers for its second quarter.
Okta reported earnings per share loss of $0.10 on revenue of $452 million to top the analyst consensus of a loss of $0.31 on revenue of $435 million.
“Looking at the second half of the fiscal year, we’re focused on refining the go-to-market strategy for the combined Auth0 and Okta sales organization, strengthening our teams, and making strategic reductions to our spend to improve profitability,” said Todd McKinnon, CEO and co-founder of Okta.
For the ongoing quarter, Okta is looking for an adjusted EPS loss of $0.24 to $0.25 on revenue in the range of $463 million to $465 million. This compares positively to the consensus that was calling for an adjusted loss per share of $0.28 on revenue of $463 million.
For its full 2023 year, Okta sees an adjusted loss per share in the range of $0.70 to $0.73, much better than the prior outlook that called for a loss per share of $1.11 to $1.14. Okta reaffirmed its prior full-year revenue guidance of $1.81 billion to $1.82 billion.
OKTA shares were also hit by the announcement that COO Freddie Kerrest will be taking a sabbatical.
A Wolfe Research analyst said results were “underwhelming” and “disappointing.” He cut the price target to $100 from the prior $108.
“The results and announcements add another layer of noise and uncertainty to a story that investors were hoping would only get cleaner with time,” the analyst said in a client note.
For a Piper Sandler analyst, Q2 results were a “mixed bag.”
“We view GTM challenges as a near-term setback, but are encouraged by continued market leadership, strength in large customer metrics and appropriate commitment to margins moving forward. We remain Overweight rated on shares,” the analyst said in a note after cutting the price target to $125 from $130.
