I last wrote about Okta (OKTA) in late September when shares were under $75 and the premier provider of "identity security" solutions was still suffering from the fallout of a breach of customer data.

I thought it was a prime opportunity to add OKTA to any cybersecurity-minded portfolio. Here's what I wrote...

Okta, a $13 billion provider of identity security solutions, is back to the upper realms of the Zacks Rank after EPS estimates turned back north this month.

What's odd is that the stock price is still in the cellar after their late August earnings report saw shares drop over 17% on the day of, and then over -25% total to Sep 10.

The problem is that Wall Street is still nervous about the company's business outlook after they had to pay $60 million to settle a data breach from two years ago.

Among 34 analysts, the average price target is above $105 and the low PT is $75.

And large institutions were big net buyers of OKTA shares in Q2.

It's almost as if everyone is waiting for more bad news as the stock sits here at $76.

So I bought some. I'm obviously looking for the "contrarian upside" to good news the stock is not being discounted for. Here's what I told my TAZR members yesterday...

TAZR Traders

Portfolio is buying Okta between $74 and $76.

I just went over the numbers and outlook. Unless somebody knows that another internal OKTA security breach is going to drop, or they are losing customers because of the way they handled the last one, I think the stock is cheap relative to all cybersecurity peers.

It's back to a Zacks #1 Rank for a reason and I don't see the worry here at $13 billion, trading under 5X sales.

In the last few weeks since the company report, the Zacks consensus EPS estimate for this fiscal 2025 (ends in January) rose 7% from $2.40 to $2.57, representing a 29X P/E in an industry loaded with 90X P/Es.

(end of TAZR Buy Alert excerpt)

Why I Think OKTA Has a Bright Future

Besides that fact that the company specializes in "identity security," in essence making sure that the person authorized for an IT function is the one being authenticated and monitored, they are also aggressively pursuing the edges of new AI threat vectors.

Yesterday, they rolled out an expansion of an existing service, Auth0, to attract more corporate clients as the threat landscape evolves. Traditional identity threats, bolstered by AI advances, are enabling low-quality, high-intensity attacks to become more dangerous and helping new, personalized attacks to emerge.

With bots making up nearly 50% of all internet traffic, developers are challenged with securing their applications in this landscape. Multi-factor authentication (MFA), with possession-based or biometric factors, remains as one of the most effective defenses.

Conversely, AI can also power bot detection, with AI helping Okta block 79% of automated login attempts and recently reduce bot traffic by 90% over a 90 day period.

(end of excerpt from my Sep 25 report where you can also read the recent press release about Auth0, their premier identity solution)

OKTA Makes the Grade

Finally this month, OKTA gets out of the cyber doghouse with their Q3 report and price targets jump over $100. Here's what I told my TAZR Trader group last week...

Okta delivered a strong report last night and price targets are climbing above $100 -- even from the reluctant "neutral" crowd (Jefferies, Susquehanna, Barclays, Piper). But here's a good summary from the biggest bulls on the Street with a $130 PT...

Guggenheim analyst John DiFucci said pressure on new deals and contract renewals is at least partially being offset by sales of news products.

"We continue to believe that this is the reason to own OKTA, and while the volatility around this name undoubtedly has caused bouts of nausea among investors, we believe the business (and stock) can build from this foundation," DiFucci wrote in a note last week.

You can get more detail about the OKTA numbers in this article...

Okta (OKTA) Reports Q3 Earnings: What Key Metrics Have to Say

Since the report, where shares gapped up above $90, she's fallen back to fill the gap from $82 and we are now pushing back above $85. I think you can still buy this premier provider now before the inevitable reach for new highs above $100.

Bottom line: Ransomware costs are expected to soar at a 30% CAGR from $35B in 2023 to $220B by 2030. You don't have to buy OKTA, but you better own at least 3 cyber firms since the enterprises needing extensive protection usually employ 5+ of them to cover all bases.