Raymond James Upgrades Okta to Outperform: Is This Beaten-Down Cybersecurity Stock a Screaming Buy at $60?

Okta (NASDAQ:OKTA) banal conscionable earned a Buy-equivalent upgrade from Raymond James, which upgraded the individuality information institution to Outperform from Market Perform and acceptable an $85 terms target. That's meaningful fixed that shares person fallen from $200 successful fiscal 2023 to astir $71 today, adjacent arsenic the underlying concern has turned the country connected profitability.

The setup matters. Okta's nett gross retention decelerated from implicit 120% to 106% due to the fact that COVID-era cohorts that overprovisioned licenses began downsizing renewals. Raymond James believes that headwind is fading, noting that Okta's mean declaration duration is conscionable nether 3 years, meaning those bloated contracts are cycling off.

Raymond James argues that its investigation of assorted metrics points to a "forward waterfall that should effect successful upside to growth" for Okta. The steadfast sees AI arsenic a meaningful tailwind, with imaginable for a meaningful full addressable marketplace summation for Okta's halfway marketplace owed to agents successful the workforce. That's a existent catalyst: Okta precocious launched Auth0 for AI Agents and positioned itself as, successful CEO Todd McKinnon's words, "the lone autarkic and neutral individuality platform" to unafraid each identity, from humans to AI agents.

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Not everyone is arsenic bullish. KeyBanc expert Eric Heath trimmed his terms people to $95 from $100 portion keeping an Overweight rating, citing mixed survey results from 36 IT and information transmission partners amid elevated constituent pricing, geopolitical uncertainty, and AI disruption. Notably, astir 20% of partners are seeing a simplification successful bundle walk successful favour of AI-native solutions, a hazard worthy watching.