Okta
Enterprise software company Okta Inc. (NASDAQ: OKTA) has seen its share price sink by nearly 66% over the past 12 months. A short-lived data breach in January caused little damage. Okta’s identity services remain in demand as the industry consolidates, primarily through private equity acquisitions of Okta’s competitors. The company has been investing in customer acquisition, and that is expensive. After posting a 52-week low in late May, shares have added nearly 14%, and a solid earnings report after Wednesday’s close could push the shares higher.
Of 30 analysts covering the stock, 22 have a Buy or Strong Buy rating, and another seven rate the stock at Hold. At a share price of around $89.80, the implied upside on the stock, based on a median price target of $140.00, is about 55.9%. At the high price target of $193.00, the upside potential is nearly 115%.
Second-quarter revenue is forecast at $430.66 million, up 3.8% sequentially and by 36.5% year over year. Okta is expected to post a loss per share of $0.30 for the quarter, three cents worse than the prior quarter’s loss and 19 cents worse than the year-ago loss. For the full 2023 fiscal year ending in January, analysts are looking for a loss per share of $1.11, compared with a year-ago loss of $0.46 per share, on sales of $1.82 billion, up 40%.
Okta is not expected to post a profit in 2023 or 2024. The multiple for estimated 2025 earnings of $0.37 per share is 240.2. The stock’s 52-week range is $77.01 to $276.30, and Okta does not pay a dividend. Total shareholder return for the past year is negative 66.8%.
Pure Storage
Shares of storage technology firm Pure Storage Inc. (NYSE: PSTG) reached an all-time high in late March before dropping by 38% just two months later. Since then, the shares have added more than 33% and traded 23.7% higher over the past 12 months. The company beat prior-quarter revenue estimates by a smart 20% but was a little short on profit. Pure Storage has beaten the consensus revenue estimate in 12 consecutive quarters. Underpromising and overdelivering — what a concept. The company reports quarterly results after Wednesday’s closing bell.
Of 20 brokerages covering the firm, 16 have a Buy or Strong Buy rating and the other four rate the shares at Hold. At a share price of around $29.80, the potential upside based on a median price target of $37.00 is 24.2%. At the high price target of $44.00, the upside potential is nearly 47.7%.
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