OCTA 3q results

Investment Analysis Clubs Saul’s Investing Discussions
1

From the MF: “In its short history as a publicly traded company, Okta (NASDAQ: OKTA) has developed an enviable pattern. The company regularly smashes its own guidance and raises its future outlook, which has made it a Wall Street darling.
Its third-quarter report was no different. The cloud-based security and identity specialist said revenue jumped 45% to $153 million, well ahead of expectations at $143.7 million. Subscription revenue rose 48% to $144.5 million, and its Remaining Performance Obligations (RPO), effectively a backlog of bookings, rose 68% to $1.03 billion, showing that the company’s contracts are becoming bigger and longer. COO Frederic Kerrest said Okta was starting to see contract lengths of five years or longer, a sign of the company’s growing reputation and customer trust. Current RPO, which will be recognized over the next year, rose 52% to $515.9 million, which bodes well for 2020.

On the bottom line, Okta’s per-share loss widened from -$0.04 to -$0.07 as expenses rose alongside revenue, though that beat estimates at -$0.12.
The company also raised its full-year guidance, now calling for revenue growth of 44% to between $574 million and $575 million, up from a previous range of 40%-41%. Nonetheless, the stock was trading down about 3% after hours, a sign that the stock may have gotten too pricey and that investors have adjusted to the company’s habit of beating its guidance and raising it.
While the market’s reaction may have been lukewarm, Okta remains on track to deliver continued growth as it penetrates a market opportunity of at least $18 billion. Let’s take a look at a few highlights from the quarter.”

For more click here https://apple.news/A636zocQWTimnwR81MuBXvA

3 Likes
2

and here is the trend for OKTA:


2018
 Q1   Q2   Q3   Q4
60%   57%  58%  50%

2019
 Q1   Q2   Q3   
50%   49%  45%

At the high end of their guidance, Q4 2019 will be +35%, but if they beat by a similar amount as they did this quarter, it will be 44%

So not as much deceleration with OKTA as we are seeing with CRWD or ZM. Granted they are at a lower growth percentage to begin with.

I still can’t figure out exactly why OKTA is valued as highly as they are, but considering that all of the shares I own have a cost basis below $30/share, I’m not complaining.

I had owned some LEAP call options in OKTA too which, although they still had quite a while before they expire, I already had some nice gains in them (in a nontaxable Roth IRA account) and am wary about the valuation so I sold those and locked in the gain last week.

I would probably be reducing my stake in my OKTA common shares a little bit too, but those aren’t in an IRA so I will hold off until at least January due to tax considerations. Either way, I will probably plan to keep most of my OKTA shares.

-mekong

12 Likes