Okta: Tremendous Value With Secure Path To Growth

Gary Alexander33.43K FollowersFollow5ShareSavePlay(9min)CommentsSummaryOkta remains a compelling 'Buy' as market fears over AI disruption are not reflected in its robust fundamentals.OKTA's recurring revenue model, broad horizontal platform, and less than 5% TAM penetration support long-term growth potential.Backlog growth outpaces revenue, net retention rates remain strong, and FCF margins approach 30%, highlighting operational strength.Valuation is attractive at 3.4x EV/FY27 revenue and 12.1x EV/FY27 FCF for a high-margin, resilient business; I reiterate my 'Buy' rating. JHVEPhoto/iStock Editorial via Getty Images It’s a fraught time for software stocks, with the so-called “SaaSpocalyspe” narrative building steam and bulldozing the stocks of many high-quality enterprise software businesses. In my view, the best move is for value-oriented investors to buckle in for a choppy ride but continue to emphasizeThis article was written byGary Alexander33.43K FollowersFollowWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.Analyst’s Disclosure: I/we have a beneficial long position in the shares of OKTA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.