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CrowdStrike vs. Okta: Which Cybersecurity Stock is a Better Buy?
CrowdStrike vs. Okta: Which Cybersecurity Stock is a Better Buy?

Yahoo

time23-06-2025

  • Business
  • Yahoo

CrowdStrike vs. Okta: Which Cybersecurity Stock is a Better Buy?

CrowdStrike CRWD and Okta OKTA are both major players in the field of cybersecurity. While CrowdStrike specializes in endpoint protection and extended detection and response ('XDR'), offering AI-native cloud security through its Falcon platform, OKTA focuses on identity and access management, providing cloud-based solutions that help businesses safeguard user and Okta are capitalizing on the rapid improvement of the cybersecurity space, fueled by the rise of complex attacks, including credential theft and abuse, remote desktop protocol attacks and social engineering-based initial access. Per a Mordor Intelligence report, the cybersecurity market is projected to witness a CAGR of 12.63% from 2025 to this strong industry growth forecast, the question remains: Which stock has more upside potential? Let's break down their fundamentals, growth prospects, market challenges and valuation to determine which offers a more compelling investment case. CrowdStrike provides its cybersecurity services mainly through its Falcon platform. CrowdStrike's Falcon platform is renowned for being the industry's first multi-tenant, cloud native, intelligent security solution. The Falcon platform helps in securing workloads across on-premise, cloud-based and virtualized environments running on several endpoints, such as desktops, laptops, servers, virtual machines and IoT cloud-based Falcon platform currently provides 29 cloud modules via a SaaS subscription model that is categorised under three categories - Endpoint Security, Security & IT Operations, and Threat Intelligence. The share of subscription-based sales to CrowdStrike's total revenues grew from 72% in fiscal 2017 to 95% in fiscal the company is facing several headwinds related to customers' negative sentiments since the global IT outage incident on July 19, 2024. The company has been implementing the Customer Commitment Package to retain its customers, which includes product additions and discounts, hence compressing its of all these measures, the company's upsell into existing customers showed signs of slowdown and the churn rate remained moderate. These factors are likely to weigh on CRWD's profitability in the near term. The Zacks Consensus Estimate for CrowdStrike's fiscal 2026 earnings indicates a year-over-year decline of 10.94%. Image Source: Zacks Investment Research Okta's latest financial results for the first quarter of fiscal 2026 highlight its strengthening position as a leader in identity security. Its broad portfolio, which includes Okta Identity Governance, Privileged Access, Device Access, Identity Security Posture Management, Identity Threat Protection with Okta AI, and Auth for GenAI, continues to drive customer wins and expand its addressable exited the first quarter with roughly 20,000 customers and $4.08 billion in remaining performance obligations, reflecting strong growth prospects for subscription revenues. Customers with more than $100K in Annual Contract Value increased 7% year over year to 4, ability to help organizations secure both human and non-human identities is becoming a key competitive advantage. During its last earnings call, the company noted that the recent boom in AI agents has resulted in a tremendous increase in non-human identities, and its Identity Security Posture Management and Privileged Access solutions have the capabilities to address this problem. Also, Okta's newly introduced suite-based pricing model is likely to encourage customers to consolidate identity solutions with Okta, driving cross-sell opportunities for the is also benefiting from a rich partner base that includes the likes of Amazon Web Services, CrowdStrike, Google, LexisNexis Risk Solutions, Microsoft, Netskope, Palo Alto Networks, Plaid, Proofpoint, Salesforce, ServiceNow, VMware, Workday, Yubico and Zscaler. These factors are likely to continue driving growth in OKTA's top and bottom lines. The Zacks Consensus Estimate for Okta's fiscal 2026 revenues and earnings indicates year-over-year growth of 9.44% and 16.73%, respectively. Image Source: Zacks Investment Research Year to date, CrowdStrike shares have appreciated 39.2% and OKTA shares have surged 26.2%. Image Source: Zacks Investment Research OKTA is trading at a forward sales multiple of 5.87X, below the security industry's 14.51X. Whereas, CRWD is trading at a forward sales multiple of 22.93X, indicating its overvaluation at present. Image Source: Zacks Investment Research While CrowdStrike is still navigating the headwinds emerging from reputational damage caused by the global IT outage and shrinking profit margin, OKTA's focus on identity solutions, stronger earnings growth potential and low valuations make the stock more attractive for investors seeking growth in the cybersecurity space. Currently, Okta carries a Zacks Rank #2 (Buy), making the stock a must-pick compared to CrowdStrike, which has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Okta, Inc. (OKTA) : Free Stock Analysis Report CrowdStrike (CRWD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research

Okta Inc (OKTA) Q1 2026 Earnings Call Highlights: Strong Profitability Amid Cautious Outlook
Okta Inc (OKTA) Q1 2026 Earnings Call Highlights: Strong Profitability Amid Cautious Outlook

Yahoo

time28-05-2025

  • Business
  • Yahoo

Okta Inc (OKTA) Q1 2026 Earnings Call Highlights: Strong Profitability Amid Cautious Outlook

Revenue Growth (Q2 FY26): Expected growth of 10%. Current RPO Growth (Q2 FY26): Expected growth of 10% to 11%. Non-GAAP Operating Margin (Q2 FY26): Expected at 26%. Free Cash Flow Margin (Q2 FY26): Expected at approximately 19%. Revenue Growth (FY26): Expected growth of 9% to 10%. Non-GAAP Operating Margin (FY26): Expected at 25%. Free Cash Flow Margin (FY26): Expected at approximately 27%. Warning! GuruFocus has detected 6 Warning Sign with OKTA. Release Date: May 27, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Okta Inc (NASDAQ:OKTA) reported strong financial performance in Q1 FY26, with record operating profitability and profit margin. The company experienced significant growth in its governance portfolio, with products like Okta Identity Governance and lifecycle management showing substantial adoption. Okta Inc (NASDAQ:OKTA) saw a nearly 400% increase in workflow executions over the past three years, indicating strong integration into customer IT infrastructures. The company is making strides in innovation, particularly with new products like Identity Security Posture Management and Okta Privileged Access, which address evolving cyber threats. Okta Inc (NASDAQ:OKTA) is well-positioned in the US public sector, with strong performance in Q1 and strategic investments yielding positive results. Okta Inc (NASDAQ:OKTA) has introduced additional conservatism in its guidance due to macroeconomic uncertainties, which could impact future performance. The company is facing headwinds in net revenue retention (NRR), which has declined for the fourth consecutive quarter. There is potential uncertainty in the US federal vertical, which could affect Okta Inc (NASDAQ:OKTA)'s federal business due to economic and political factors. Despite strong Q1 results, Okta Inc (NASDAQ:OKTA) is cautious about the macroeconomic environment, which could impact growth in the latter half of FY26. The company's go-to-market specialization is still in early stages, and while initial signals are positive, the long-term success of this strategy remains to be seen. Q: You've layered in additional conservatism into your guidance. What factors influenced this decision, and how do you see these impacting Q1 and future quarters? A: Todd McKinnon, CEO, explained that while Q1 was strong and on track, the guidance reflects a cautious approach due to macroeconomic uncertainties. Brett Tighe, CFO, added that while no macro impact was seen in Q1, the guidance includes potential risks due to the current economic environment, maintaining less conservatism than in previous models. Q: Can you elaborate on the go-to-market specialization and its impact on your business? A: Todd McKinnon noted that the specialization into Okta and Auth0 sellers is progressing well, with strong performance from Auth0 and a solid pipeline build. Eric Kelleher, COO, emphasized that specialization has proven effective in the past and is expected to enhance focus and enablement, benefiting both Okta and its customers. Q: How is the new suite-based pricing for the Okta platform performing, and what are the expectations? A: Todd McKinnon stated that the suite-based pricing introduced in Q1 is showing positive results, with customers opting for bundled products in good, better, best configurations. This approach leverages Okta's broad product portfolio and appeals to customers seeking strategic consolidation around identity. Q: What is the outlook for the customer identity side of the business, particularly with Auth0? A: Todd McKinnon highlighted that Auth0 had a strong Q1, driven by large customer deals. The introduction of Auth for GenAI is expected to further enhance demand, especially among smaller companies innovating in AI, indicating a broad-based opportunity for growth. Q: How does Okta plan to address the emerging market for non-human identities (NHIs) and AI agents? A: Todd McKinnon explained that Okta's comprehensive solution, including Identity Security Posture Management and Privileged Access, positions it well to manage NHIs. The company is focused on innovating and executing to maintain its lead in this growing market, emphasizing the importance of identity in AI-driven environments. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Should You Buy, Hold or Sell OKTA Stock Before Q1 Earnings Release?
Should You Buy, Hold or Sell OKTA Stock Before Q1 Earnings Release?

Yahoo

time22-05-2025

  • Business
  • Yahoo

Should You Buy, Hold or Sell OKTA Stock Before Q1 Earnings Release?

Okta OKTA is set to release first-quarter fiscal 2026 results on May the fiscal first quarter of 2026, Okta anticipates non-GAAP earnings in the range of 76-77 cents per share. Revenues are expected to be in the range of $678-$680 million, indicating growth of 10% from the year-ago period's reported Zacks Consensus Estimate for earnings has remained steady at 77 cents per share over the past 30 days, indicating year-over-year growth of 18.46%. The consensus mark for revenues is pegged at $679.73 million, indicating an increase of 10.17% from the year-ago quarter's reported figure. Okta's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, with the average earnings surprise being 15.70%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Okta, Inc. price-eps-surprise | Okta, Inc. Quote Let's see how things have shaped up for Okta prior to this announcement: OKTA's expanding product portfolio, especially in security and identity governance, is expected to have helped it win clients, driving top-line growth in the to-be-reported quarter. It exited fourth-quarter fiscal 2025 with 19,650 customers and $4.215 billion in remaining performance obligations, reflecting strong growth prospects for subscription revenues. Customers with more than $100 thousand in Annual Contract Value increased 7% year over year to 4, momentum from new products like Okta Identity Governance, Privileged Access, Identity Threat Protection with Okta AI, Workforce Identity Suites and Auth for GenAI is expected to have been a tailwind in the to-be-reported quarter. More than 20% of the fiscal fourth-quarter bookings came from these products. The trend is expected to have continued in the to-be-reported quarter. Okta Identity Governance, in particular, has grown to more than 1,300 customers contributing more than $100 million in annual contract value within just two years of launch. This rapid adoption is expected to drive bookings to grow further in the to-be-reported is expected to benefit from a rich partner base that includes the likes of Amazon's AMZN cloud computing platform Amazon Web Services (AWS), CrowdStrike, Google, LexisNexis Risk Solutions, Netskope, Palo Alto Networks, Plaid, Proofpoint, Salesforce, ServiceNow, VMware, Workday, Yubico and Zscaler. Okta's increasing strength in its partner ecosystem, particularly through its relationship with Amazon Web Services, supported its security efforts. With more than 70% of deals influenced by partners in the fourth quarter of fiscal 2025, Okta was able to leverage its security capabilities more effectively. In fact, OKTA surpassed $1 billion in aggregate total contract value through its partnership with Amazon Web Services. Benefits from this partnership are likely to have been reflected in the to-be-reported quarter's performance. Okta shares have surged 54.9% in the year-to-date period against the Zacks Computer & Technology sector's decline of 2%. The Zacks Security industry has increased 17.1% in the same time frame. The outperformance can be attributed to the strong demand for its identity security solutions and rich partner base. Image Source: Zacks Investment Research OKTA stock is not so cheap, as the Value Score of F suggests a stretched valuation at this terms of forward 12-month Price/Sales, OKTA is trading at 7.22X, higher than the Computer & Technology broader sector's 6.14X. Image Source: Zacks Investment Research Okta's robust portfolio is helping it expand its clientele. It benefits from positive industry trends, including growing demand for identity the company faces stiff competition from CyberArk CYBR and Microsoft MSFT, which are also rapidly expanding its footprint in the identity and access management competitive pressure is highlighted by Microsoft's strong performance in the security segment. Microsoft's Entra identity offering now serves more than 900 million monthly active users. Furthermore, Microsoft now serves 1.4 million security customers in the security segment, with more than 900,000 of these customers utilizing four or more workloads, representing a 21% year-over-year increase in the third quarter of fiscal is also making advancements to strengthen its position. In April 2025, CyberArk announced the CyberArk Secure AI Agents Solution, which will allow organizations to implement identity-first security for agentic AI using the CyberArk Identity Security Platform. Okta is suffering from challenging macroeconomic conditions due to higher tariffs, which could put pressure on its future performance. Intense competition and stretched valuation also remain a concern. These factors could affect the company's performance in the to-be-reported quarter despite strong product currently carries a Zacks Rank #4 (Sell), which implies that investors should stay away from investing in this stock at can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report CyberArk Software Ltd. (CYBR) : Free Stock Analysis Report Okta, Inc. (OKTA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

OKTA vs. Fortinet: Which Cybersecurity Stock Should You Bet On?
OKTA vs. Fortinet: Which Cybersecurity Stock Should You Bet On?

Yahoo

time21-05-2025

  • Business
  • Yahoo

OKTA vs. Fortinet: Which Cybersecurity Stock Should You Bet On?

Okta OKTA and Fortinet FTNT are both major players in the field of cybersecurity. While OKTA focuses on identity and access management, providing cloud-based solutions that help businesses safeguard user data, Fortinet is a well-known provider of network security appliances and a Unified Threat Management network global security market is expected to benefit from growing usage of generative AI, machine learning and the cloud. Gartner expects global end-user spending on information security to hit $212 billion this year, growing 15.1% year over year. This bodes well for both Okta and Okta or Fortinet, which of these cybersecurity stocks has the greater upside potential? Let's find out. OKTA is benefiting from strong demand for its identity security solutions. An innovative portfolio that includes Okta Identity Governance, Privileged Access, Device Access, Fine Grain Authorization, Identity Security Posture Management and Identity Threat Protection with Okta AI is expected to help OKTA shares surge in rides on strong demand for new products, with more than 20% of fourth-quarter fiscal 2025 bookings from new products. OKTA's innovative portfolio is helping the company win clients, driving top-line growth. It exited fourth-quarter fiscal 2025 with 19,650 customers and $4.215 billion in remaining performance obligations, reflecting strong growth prospects for subscription revenues. Customers with more than $100 thousand in Annual Contract Value increased 7% year over year to 4, offerings include Okta AI, a suite of AI-powered capabilities embedded across several products, which empowers organizations to harness AI to build better experiences and protect against cyberattacks. Okta Platform and Auth0 Platform are compatible with public clouds, on-premises infrastructures and hybrid is benefiting from a rich partner base that includes the likes of Amazon Web Services, CrowdStrike, Google, LexisNexis Risk Solutions, Microsoft, Netskope, Palo Alto Networks, Plaid, Proofpoint, Salesforce, ServiceNow, VMware, Workday, Yubico and Zscaler. The company has over 7,000 integrations with cloud, mobile, and web applications and IT infrastructure providers as of Jan. 31, 2025. Fortinet continued to demonstrate strong momentum in network security, driven by its dominance in firewall deployments and secure networking. The company maintains its position as the most deployed firewall vendor globally.A key driver of Fortinet's performance has been the expansion of its unified Secure Access Service Edge (SASE) platform. Fortinet remains the only vendor to organically develop all core SASE capabilities within a single operating system, including next-gen firewall, SD-WAN, DDNA, Secure Web Gateway, CASB, and DLP technologies, improving user experience while reducing complexity and has been showcasing growing traction with its sovereign SASE solution, tailored for highly regulated sectors, such as finance and healthcare. This offering ensures full on-premise or in-country data control, addressing compliance needs without compromising performance. As a result, Fortinet's secure networking business is continuing to gain market share, supported by high performance and a unified approach to continues to invest in expanding its AI capabilities. The company currently holds more than 500 issued and pending AI patents. New AI capabilities like FortiAI Assist for automating security tasks, FortiAI Protect for advanced threat detection, and FortiAI Secure AI for protecting AI infrastructure are driving clientele. Year to date, Fortinet shares have appreciated 10.9%, while OKTA shares have surged 60.5%. Image Source: Zacks Investment Research Valuation-wise, FTNT and OKTA shares are currently overvalued, as suggested by a Value Score of D and terms of forward 12-month Price/Sales, Fortinet shares are trading at 11.38X, higher than OKTA 7.49X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Fortinet's 2025 earnings is pegged at $2.15 per share, up 1.9% over the past 30 days, indicating a 2.74% increase year over year. Fortinet, Inc. price-consensus-chart | Fortinet, Inc. Quote However, the Zacks Consensus Estimate for OKTA's fiscal 2026 earnings is pegged at $1.09 per share, unchanged over the past 30 days, indicating a 172.14% jump year over year. Okta, Inc. price-consensus-chart | Okta, Inc. Quote Both FTNT's and OKTA's earnings beat the Zacks Consensus Estimate in all the trailing four quarters. However, OKTA's average surprise of 204.9% is better than FTNT's surprise of 30.98%, reflecting a good quality of earnings beat on a consistent basis. Fortinet is benefiting from rising demand from large enterprise customers and growth in the company's security subscriptions. The company is gaining from the robust growth in Fortinet Security Fabric, cloud and Software-defined Wide Area Network (SD-WAN) offerings. However, OKTA is suffering from challenging macroeconomic conditions due to higher carries a Zacks Rank #2 (Buy) that makes it a better buy compared with Okta, which currently has a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fortinet, Inc. (FTNT) : Free Stock Analysis Report Okta, Inc. (OKTA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Okta Shares Soared on Management's Outlook. Is It Too Late to Buy the Stock?
Okta Shares Soared on Management's Outlook. Is It Too Late to Buy the Stock?

Yahoo

time09-03-2025

  • Business
  • Yahoo

Okta Shares Soared on Management's Outlook. Is It Too Late to Buy the Stock?

Share prices of Okta (NASDAQ: OKTA) surged higher after the cybersecurity company on Monday reported fiscal 2025 fourth-quarter results that easily topped analyst expectations and offered upbeat guidance. The stock trades up about 30% year to date as of this writing, although it's still down over the past 12 months. With that initial pop in the books, can Okta continue to rally, or have investors missed their near-term window to buy the stock? Okta suffered a big cybersecurity failure in the autumn of 2023 when hackers stole data from customers who used its support system. That put a damper on the stock price through much of 2024, but the impact of the incident now appears to be in the rear-view mirror. For its fiscal Q4, which ended Jan. 31, Okta's revenue increased by 13% year over year to $682 million, which blew past both its $667 million to $669 million guidance range and the $669 million analyst consensus compiled by FactSet. Subscription revenue also rose by 13% to $670 million. Adjusted earnings per share (EPS) jumped 24% to $0.78 from $0.63 a year ago. The company had guided for adjusted EPS to be between $0.73 and $0.74. Okta's net dollar retention rate -- which measures the amount of revenue that came from established customers relative to their prior-year spending -- was 107%. Management expects it to remain in that neighborhood in fiscal 2026. That metric has drifted lower in recent quarters, a trend Okta attributed to relatively low hiring rates among its clients. Its net dollar retention rate was 111% in fiscal 2024. Okta continues to add customers, and it's doing particularly well at bringing on new enterprise-level clients. It added about 200 total customers in the quarter, ending the fiscal year with 19,650, an increase of 4% year over year. Customers with annual contract values (ACVs) above $100,000 rose to 4,800, up 7% year over year, and customers with ACVs of more than $1 million climbed by 22% to 470. That customer cohort accounted for over $1 billion in total ACV. The company said that its Okta Identity Governance (OIG) solution has been a strong seller since its launch two years ago; it now has 1,300 customers with a total ACV of more than $100 million. Later this month, the company will launch its new Auth for GenAI solution, which will help customers securely build and scale generative AI applications. It says it has a waitlist of customers looking to try the product. Okta's remaining performance obligation (RPO) backlog climbed by 25% to $4.22 billion, while its current RPO (cRPO) backlog, which is subscription backlog expected to be recognized over the next 12 months, increased by 15% to nearly $2.25 billion. Both metrics are based on signed contracts and are an indication of future revenue. Both its RPO and cRPO backlog growth saw nice accelerations in growth from their fiscal Q3 levels. Management is now guiding for fiscal 2026 revenue to be between $2.85 billion and $2.86 billion, which would amount to growth of 9% to 10%. The company had previously forecast fiscal 2026 revenue would be between $2.77 billion and $2.78 billion. It's also now projecting adjusted EPS of $3.15 to $3.20 for the year. For fiscal Q1 2026, it guided for revenue to grow by about 10% to between $678 million to $680 million, which was above the $670 million analyst consensus. It is looking for adjusted EPS to be between $0.76 to $0.77. With a forward price-to-sales (P/S) ratio of about 6 times fiscal 2026 analyst estimates, Okta is still reasonably valued relative to many other cybersecurity stocks. The company has been conservative with its guidance recently, and in part as a result surpassed the high end of its original fiscal 2025 revenue guidance range by 4%. A similar outcome in fiscal 2026 would see Okta produce revenue of around $2.9 billion, which would represent growth of around 11%. Fiscal 2025's Q4 was a good quarter and I expect the company to continue to raise its guidance throughout fiscal 2026. That said, I would not chase the stock at this time. Cybersecurity investors tend to prefer growth, and Okta's revenue growth rates are still relatively low compared to top-tier companies in the industry. With the labor market environment likely to not be robust this year (a condition which could drag on Okta's growth), I'd stay on the sidelines. Before you buy stock in Okta, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Okta wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $677,631!* Now, it's worth noting Stock Advisor's total average return is 822% — a market-crushing outperformance compared to 166% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of March 3, 2025 Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike, FactSet Research Systems, and Okta. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy. Okta Shares Soared on Management's Outlook. Is It Too Late to Buy the Stock? was originally published by The Motley Fool Sign in to access your portfolio

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