Okta (NASDAQ: OKTA) Braces for Earnings – Stock Finds Some Support at $80

Okta, Inc. (NASDAQ: OKTA), a leading provider of identity and access management solutions, is set to release its third-quarter fiscal year 2026 earnings today, with the market keenly awaiting to see if the company can maintain its upward trajectory.

Okta's stock price has moved above the $80 level, up, 1.53% at $81.88 ahead of the print. The stock has experienced a volatile year, trading between $76.35 and $127.57, ultimately resulting in a modest 3.9% gain YTD.

Ahead of the earnings release, Okta's performance has been a little rocky. The stock currently trades below both its 50-day ($89.13) and 200-day ($98.49) simple moving averages, a technical indicator that often signals a bearish trend. This contrasts with the optimism generated earlier in the year following strong Q4 fiscal 2025 results, which saw the stock surge on the back of impressive revenue growth, profitability gains, and robust cash flow.

For the upcoming quarter, Okta anticipates revenue between $728 million and $730 million, exceeding the consensus analyst estimate of $722.9 million. The company also projects adjusted earnings per share (EPS) between $0.74 and $0.75, aligning with analysts' expectations. These figures suggest continued strong demand for Okta's cybersecurity tools.

However, recent market dynamics and analyst sentiment paint a more complex picture. JPMorgan recently lowered its price target on Okta from $140 to $115, while maintaining an “Overweight” rating.

The firm anticipates healthy Q3 results fueled by identity consolidation tailwinds but expresses concerns about developer-focused valuation. JPMorgan also expects Okta's net revenue retention rate, which was 106% in Q2, to improve. Investors are looking for evidence of better growth next year.

This price target reduction reflects a broader trend of peer multiple compression in the market, adding pressure on Okta to demonstrate sustainable growth and profitability. The company's earlier cautious guidance, issued in May 2025 despite strong Q1 results, led to a stock decline as investors worried about slowing momentum. This highlights the market's sensitivity to any signs of deceleration in Okta's growth narrative.

Okta (OKTA): Key Considerations Ahead of Q3 Earnings

• Upcoming Earnings Release: December 2, 2025
• Revenue Guidance: $728M – $730M (vs. $722.9M analyst consensus)
• EPS Guidance: $0.74 – $0.75 (aligns with analyst expectations)
• JPMorgan PT: $115 (Overweight rating maintained)
• Key Themes: Identity consolidation, valuation concerns, growth sustainability

While the consensus appears to anticipate healthy results tempered by valuation concerns, a contrarian perspective suggests that the market may be underestimating Okta's long-term potential. The recent pullback in stock price could represent a buying opportunity for investors who believe in Okta's ability to innovate and expand its market share.

The company's strategic focus on securing AI technologies, as evidenced by the recent board appointments of David Schellhase and Mary Agnes (Maggie) Wilderotter, positions it well to capitalize on the growing demand for secure AI solutions. Furthermore, Microsoft's potential interest in acquiring Okta, as speculated in July 2025, underscores the company's strategic value in the cybersecurity landscape. If Okta can successfully execute its growth strategy and address the market's valuation concerns, it could potentially deliver significant returns for investors in the long run.

Adding to the narrative, Okta's history of strong Q4 performance and subsequent stock surges, as seen in March 2025, suggests that a positive earnings surprise could trigger another rally. The company's ability to generate robust operating and free cash flow further strengthens its financial position and provides flexibility for future investments and acquisitions.

However, investors should also be aware of the risks associated with Okta's business. The cybersecurity landscape is constantly evolving, and Okta faces increasing competition from established players and emerging startups. Any failure to adapt to changing market dynamics or to maintain its technological edge could negatively impact its growth prospects. The company is positioned to report “healthy” Q3 results on identity consolidation tailwinds.

Ultimately, Okta's success will depend on its ability to execute its strategic vision, manage its valuation concerns, and navigate the complex cybersecurity landscape. The upcoming earnings release will provide valuable insights into the company's progress on these fronts and will likely have a significant impact on its stock price. Investors should carefully weigh the potential risks and rewards before making any investment decisions.