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There's been a notable change in appetite for Okta, Inc. (NASDAQ:OKTA) shares in the week since its annual report, with the stock down 17% to US$216. Okta reported revenues of US$835m, in line with expectations, but it unfortunately also reported (statutory) losses of US$2.09 per share, which were slightly larger than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Okta after the latest results.
View our latest analysis for Okta
Taking into account the latest results, the current consensus from Okta's 22 analysts is for revenues of US$1.09b in 2022, which would reflect a major 30% increase on its sales over the past 12 months. Losses are forecast to balloon 32% to US$2.75 per share. Before this earnings announcement, the analysts had been modelling revenues of US$1.07b and losses of US$2.13 per share in 2022. While this year's revenue estimates held steady, there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target held steady at US$269, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Okta, with the most bullish analyst valuing it at US$300 and the most bearish at US$232 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Okta's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 30% growth on an annualised basis. This is compared to a historical growth rate of 38% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% annually. So it's pretty clear that, while Okta's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.