OKTA
Okta, Inc.
Technology · Software - Infrastructure · United States · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Strong year-over-year growth in revenue and a dramatic improvement in net income and EPS drove high scores on the growth and momentum factors, anchoring the composite [growth.revenue.yoy, growth.net_income.yoy, growth.eps_diluted.yoy].
- Profitability has turned positive but remains modest in absolute terms, with net margin at 8.1% and return on assets at 2.4%, resulting in a mid-range profitability score [profitability.net_margin_pct, profitability.roa_pct].
- The absence of a dividend and no positive contribution from the macro theme assignment both scored zero, which weighed on the overall composite and contributed to the 45.7 out of 100 total score [dividend.none, theme.assigned].
Why Not Higher
- Profitability margins—8.1% net margin, 5.1% operating margin, and 2.4% return on assets—remain modest in absolute terms, preventing a higher profitability score despite the year-over-year improvement [profitability.net_margin_pct, profitability.operating_margin_pct, profitability.roa_pct].
- The zero scores on both the dividend and macro theme factors structurally limited the composite, as no dividend income is available to investors and the Cybersecurity theme assignment did not award points under the model's current methodology [dividend.none, theme.assigned].
Data Confidence
7 / 10
High — most data fields present
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from $2,610,000,000 in FY2025 to $2,919,000,000 in FY2026, a gain of +11.8%. Net income surged from $28,000,000 in FY2025 to $235,000,000 in FY2026 (+739.3%), while diluted EPS rose from $0.06 in FY2025 to $1.31 in FY2026 (+2083.3%).
The model rewarded the combination of solid top-line expansion and a dramatic acceleration in bottom-line profitability, with the near-elimination of losses driving outsized percentage gains in net income and EPS that pushed the score close to the maximum.
In FY2026, Okta posted a net margin of 8.1%, an operating margin of 5.1%, and a return on assets of 2.4%.
While the company has crossed into positive territory on all three measures, the margins and asset returns remain modest in absolute terms, which the model reflects with a mid-range score rather than a high one.
Filing evidence currently available does not support a more specific explanation for this factor.
Quarterly revenue showed steady sequential growth across the last four reported quarters: $728,000,000 in 2026Q2, $742,000,000 in 2026Q3, $761,000,000 in 2026Q4, and $765,000,000 in 2027Q1. Operating income followed a recovery-and-acceleration pattern, rising from $41,000,000 in 2026Q2, dipping to $23,000,000 in 2026Q3, then climbing to $46,000,000 in 2026Q4 and $56,000,000 in 2027Q1. Net income similarly recovered to $74,000,000 in 2027Q1 after a trough of $43,000,000 in 2026Q3.
The model rewarded the consistent upward drift in revenue and the clear rebound and acceleration in both operating and net income through the most recent quarter, signaling improving operational execution over the trailing period.
Okta does not currently pay a dividend; this is a genuine characteristic of the company, not a data limitation.
The model assigns a score of zero for this factor because no dividend income is available to investors, which is consistent with many high-growth technology companies that reinvest cash rather than distribute it.
Okta is assigned to the Cybersecurity macro theme.
Although Okta carries the Cybersecurity theme assignment, this assignment did not translate into a positive score under the model's current methodology; the theme is accurately reflected in the classification, but the scoring component did not award points in this instance.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Okta delivered solid top-line growth of 11.8% year-over-year, with revenue rising from $2.61 billion in FY2025 to $2.92 billion in FY2026, while net income surged from $28 million to $235 million, reflecting a dramatic improvement in bottom-line profitability [growth.revenue.yoy, growth.net_income.yoy]. Quarterly momentum has been consistent, with revenue climbing steadily from $728 million in 2026Q2 to $765 million in 2027Q1, and operating income accelerating to $56 million in the most recent quarter [momentum.revenue_quarterly, momentum.operating_income_quarterly]. However, profitability margins remain modest in absolute terms—net margin of 8.1%, operating margin of 5.1%, and return on assets of 2.4%—and the absence of a dividend alongside no positive macro theme score weighed on the composite [profitability.net_margin_pct, profitability.operating_margin_pct, dividend.none]. The overall model score of 45.7 out of 100 and a Very High risk rating reflect a company in transition: meaningfully improved but not yet fully mature in its financial profile.
Plain English
Okta is growing its revenue steadily and recently turned much more profitable, but its margins are still relatively thin and it pays no dividend, which is why the model gives it a middling score and flags it as high risk.
Bull Case vs. Bear Case
Bull Case
- Revenue grew 11.8% year-over-year to $2.92 billion in FY2026, demonstrating durable top-line expansion in the cybersecurity space [growth.revenue.yoy].
- Net income jumped from $28 million to $235 million in a single year, and diluted EPS rose from $0.06 to $1.31, signaling a dramatic acceleration in bottom-line profitability [growth.net_income.yoy, growth.eps_diluted.yoy].
- Quarterly operating income reached $56 million in 2027Q1, continuing a clear rebound-and-acceleration trend from $23 million in 2026Q3, suggesting improving operational execution [momentum.operating_income_quarterly].
Bear Case
- Despite crossing into profitability, net margin stands at only 8.1% and return on assets at just 2.4%, indicating that absolute profitability remains modest relative to the company's scale [profitability.net_margin_pct, profitability.roa_pct].
- Okta pays no dividend, meaning investors receive no current income, which reduces the stock's appeal to income-oriented investors and contributed a zero score on that factor [dividend.none].
- The macro theme assignment to Cybersecurity did not translate into a positive score under the model's methodology, limiting the composite score despite the thematic relevance [theme.assigned].
What Could Change the Picture
Bullish Triggers
- A sustained expansion of net and operating margins well beyond current levels of 8.1% and 5.1% respectively would signal that Okta's profitability improvement is structural rather than transitional [profitability.net_margin_pct, profitability.operating_margin_pct].
- Continued sequential revenue acceleration beyond the current $765 million quarterly run rate, combined with further operating income growth above $56 million per quarter, would strengthen the momentum case [momentum.revenue_quarterly, momentum.operating_income_quarterly].
Bearish Triggers
- A reversal in the quarterly operating income trend—falling back toward the $23 million trough seen in 2026Q3—would undermine confidence in the company's operational improvement narrative [momentum.operating_income_quarterly].
- If net margin fails to expand meaningfully from its current 8.1% level despite revenue growth, it would suggest persistent cost pressures limiting the profitability thesis [profitability.net_margin_pct, growth.revenue.yoy].
Risk Profile
Very High RiskThe Very High risk rating reflects a company still in the early stages of consistent profitability, with operating income showing some quarter-to-quarter variability—dipping to $23 million in 2026Q3 before recovering to $56 million in 2027Q1—suggesting execution risk remains [momentum.operating_income_quarterly]. With total assets of $9.71 billion and margins that are positive but thin, the financial profile supports cautious further research rather than high conviction [financial_health.total_assets, profitability.net_margin_pct].
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.