Okta (NASDAQ:OKTA) shares rose more than 2% intra-day today after it received an upgrade from JPMorgan analysts, who raised the stock’s rating from Neutral to Overweight and set a price target of $100, implying a 22% upside. The upgrade followed a reassessment of Okta’s growth and profitability prospects, which now appear more favorable.
Okta reset its fiscal 2026 revenue expectations with a cautious outlook, establishing a conservative growth target of 7%. This cautious baseline made the risk/reward profile more attractive, particularly as Identity Access Management (IAM) gained strategic importance in enterprise security. Okta’s position as a leading IAM provider and a key player in cloud-based security solutions positioned it well to capitalize on this trend.
Recent performance metrics supported optimism. The company reported current remaining performance obligations (cRPO) growth of 12.7% year-over-year, alongside an estimated bookings growth acceleration to 30%. These figures signaled improving traction in Okta’s markets, boosting confidence in its ability to achieve sustained growth.
Okta also exceeded expectations with profitability guidance, forecasting an operating margin of 22% and a free cash flow (FCF) margin of 24% for the next fiscal year. At its current valuation of 17.0x EV/FCF on 2026 estimates, the stock presented an attractive opportunity for investors.
Key drivers of Okta’s future growth included strong momentum in large enterprise adoption, the ability to cross-sell new products, and further expansion into international markets. The company’s strategic investments appeared to be yielding results, setting the stage for a reacceleration in top-line growth.
With signs of improving execution and the growing importance of identity security as a core priority for businesses, Okta is well-positioned to deliver both fundamental performance improvements and potential multiple expansion.