Okta Inc. Class A Common Stock (OKTA)

FairStock Score: 33/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Okta is a better business than it was a few years ago. In fiscal 2024, the company lost $355.0 million, but by fiscal 2026 it earned $235.0 million, and in fiscal Q2 2027, the quarter ended 2026-07-31, revenue was $805.0 million with net income of $116.0 million. Revenue rose from $728.0 million in fiscal Q2 2026, while net income rose from $67.0 million, so the turnaround is real; FairStock calls it a TURNAROUND, which fits because it returned to profit after a loss within the last three years. The balance sheet is a strength: debt-to-equity is 0.01, Altman Z-score is 10.46, Piotroski is 9/9, and trailing free cash flow is $959.0 million. That cash generation gives management room to invest or buy back stock. The identity software market benefits from switching costs once Okta is embedded in a customer's sign-on and access workflows, which is a modest moat. But the price is the problem. At $220.01 on 2026-10-26, FairStock calculates a P/E of 132.54, P/B of 5.52, EV/EBITDA of 90.74, and FCF yield of only 2.4%. The Graham Number is $38.60, so the stock trades at a huge negative margin of safety (-451.94%). ROE of 4.31% and ROCE of 1.58% are still low, and revenue growth of about 10.6% is not enough to justify such a rich multiple by Graham standards. Okta passes the quality tests but fails the value test. I would want either much lower expectations embedded in the price or a long runway of high profit growth before calling it a bargain.

In plain English: Okta sells identity and access software that helps companies let the right people into their systems and keep others out. The business has turned profitable, generates cash, and carries little debt, but sales are growing at a modest pace. At $220.01 a share, the stock looks very expensive compared with the company’s current profit and accounting value.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-26 close · note generated 2026-10-28 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2027 10-Q (period ended 2026-07-31) · fiscal Q1 2027 10-Q (period ended 2026-04-30) · fiscal Q3 2026 10-Q (period ended 2025-10-31) · fiscal Q2 2026 10-Q (period ended 2025-07-31) · FY2026 10-K (period ended 2026-01-31) · FY2025 10-K (period ended 2025-01-31) · FY2024 10-K (period ended 2024-01-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer