What Would Okta’s CEO Say Now?
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The past month has been difficult for investors who own Okta (OKTA). The stock lost 21.5% in total return from October 12 to November 10, while the S&P 500 lost 3.6%. Yet the business behind it has rarely been more profitable.
In August, management raised its full-year forecasts for revenue, adjusted operating profit, earnings per share and free cash flow. So what case would Okta’s chief executive make to a shareholder today?
Management Points To Faster Demand
Okta’s chief executive would most likely start with demand, just as management did on the August 26 call. Management said it saw “an acceleration in annual contract value growth for both workforce identity and customer identity,” its two core platforms. In other words, the yearly value of Okta’s contracts on those two platforms grew faster than before.
Newer products offer a second point. Management said they made up about 30% of bookings in fiscal Q2 2027, with Okta Identity Governance as the leading contributor.
Those are fair points, and they matter. Both metrics describe what customers signed in the quarter, however, rather than the revenue Okta reported.
You Still Pay More For Okta Than In June
Even after the fall, Okta stock is priced at 10.1 times its sales over the past twelve months. At the end of June, the shares were priced at 7.7 times the same twelve months of sales. Investors now pay about 31% more for each dollar of those sales than they did then.
The S&P 500, viewed as a single company, is priced at 3.2 times its sales. A valuation more than three times the market’s suggests buyers still expect Okta’s sales to grow quickly for many years.
Okta’s Sales Growth Has Slowed
Okta’s revenue grew 10.6% in fiscal Q2 2027 from a year earlier, down from 12.7% growth in fiscal Q2 2026. For fiscal Q3 2027, management forecast revenue of $813 million to $817 million. At the midpoint, that would be growth of just under 10% from the $742 million Okta reported a year earlier, a slower pace again. Management said its full-year revenue forecast includes about a 1-point drag from moving more of its professional services work to partners.
Management has spoken about its AI agents product. On the August 26 call, it said Okta for AI Agents is still too small to show up in its results, while adding that it is very optimistic about the next couple of years. Management also said it is being prudent about how fast the record pipeline for its AI agents product turns into sales.
Where Okta Is Strongest: Profit And Cash
Okta’s reported operating margin over the twelve months to July 2026 was 7.7%, the highest at any quarter-end in our data, which start at fiscal Q3 2017. Two years earlier, Okta lost 9.3 cents on every dollar of sales.
In fiscal Q2 2027 alone, Okta kept 13.3 cents of operating profit from each dollar of revenue, against 5.6 cents a year earlier. It also turned 31.2% of its sales into free cash flow over its latest twelve months. Over their own latest twelve months, CrowdStrike managed 28.2% and Zscaler 23.2%.
Okta also ended July with $2.3 billion of cash and short-term investments, against debt of just $53 million.
Management says demand is speeding up, and reported sales have not caught up yet. Okta’s revenue growth from a year earlier is the number to watch, and the next reading comes with fiscal Q3 2027 results, expected in December 2026.
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