Okta Eyes 15% Revenue CAGR by FY26: What's the Upside Potential?
For first-quarter fiscal 2026, Okta reported an 11.5% revenue increase to $688 million, and particularly, its remaining performance obligations (RPO) rose 21% year over year, reflecting a solid pipeline of committed future business.
A key catalyst is Okta's expanding identity platform. High-growth offerings like Identity Governance, Privileged Access and Device Access are strengthening its trusted security services and deepening its relevance across enterprise IT. To better serve distinct customer segments, the company has also separated its sales teams for Workforce Identity and Customer Identity (Auth0), a move expected to sharpen focus and improve sales execution.
Okta continues to gain strong traction among large enterprises through strategic partnerships like AWS. The number of customers generating more than $1 million in annual contract value (ACV) grew 20% year over year.
Despite macroeconomic headwinds, Okta's strong execution, growing enterprise base and growing relevance in cloud security offer a clear runway to achieve its goal.
OKTA Faces Stiff Competition From Microsoft & CyberArk
Microsoft MSFT poses a strong challenge to Okta through Entra ID, its seamlessly integrated IAM platform across Microsoft 365, Azure and Windows. Entra now supports over 900 million monthly active users, while Microsoft's broader security ecosystem supports 1.4 million customers. With widespread adoption of Databricks and Snowflake on Azure, and Microsoft 365's dominance in productivity software, Microsoft reinforces its leadership in identity, cloud security and scalable IaaS/PaaS solutions, making it a cornerstone of modern enterprise infrastructure.
CyberArk Software CYBR, a privileged access management leader, stands out against Okta with its advanced identity security platform and strong profitability. Strategic acquisitions such as Venafi and Zilla Security have enhanced its capabilities, increasing threat detection and response. By proactively securing privileged access and streamlining security infrastructure, CyberArk helps organizations prevent breaches while lowering total cost of ownership, offering a compelling edge in enterprise cybersecurity and identity governance.
OKTA's Price Performance, Valuation & Estimates
Shares of Okta have gained 24.5% year to date compared with the Zacks Security industry's return of 22%.
OKTA YTD Price Return Performance
Okta currently trades at a premium with a forward Price/Cash Flow ratio of 23.11, higher than the broader Zacks Computer and Technology sector's 20.02X. OKTA has a Value Score of D.
OKTA Forward 12-Month Price/CF Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings is pegged at 84 cents per share, up by 5 cents over the past 60 days, indicating 16.67% year-over-year growth.
The consensus mark for fiscal 2026 earnings is pegged at $3.28 per share, which increased 2.8% over the past 60 days. The earnings figure suggests 16.73% growth over the figure reported in fiscal 2025.
OKTA stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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Microsoft Corporation (MSFT): Free Stock Analysis Report
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