Okta Shares Slide Amid Cautious Outlook and Analyst Downgrades

Published 2 days agoOKTA

Okta Shares Slide Amid Cautious Outlook and Analyst Downgrades

Okta's stock took a hit, dropping around 10% after the company issued a cautious outlook that rattled investors. The company's guidance, pointing to just 9% growth in the third quarter, has sparked concerns over its long-term growth prospects.

Analysts reacted swiftly to Okta's announcements. Scotiabank reduced its price target for the company to $92 from $104, citing a downward shift in Okta's growth trajectory and a declining Net Revenue Retention (NRR) rate. JPMorgan followed suit, lowering its price target to $105 from $110 while maintaining a Neutral rating, attributing the adjustments to broader macroeconomic challenges facing Okta's market environment.

Okta's management has expressed worries regarding potential financial pressures later in fiscal year 2025, driven by customers potentially re-evaluating their software investments upon renewal. These concerns about future business momentum and customer retention reflect Okta's strategic focus on navigating potential hurdles in sustaining its growth trajectory.

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