TLDR
- Okta (OKTA) witnessed a 7.7% decline on Friday, reaching a 52-week low of $75.04
- Q3 FY2026 earnings exceeded projections: EPS was $0.82 versus the expected $0.76, revenue stood at $742M, a year-over-year rise of 11.6%
- The board sanctioned a $1 billion share repurchase program, accounting for approximately 6.8% of the outstanding stock
- The consensus analyst rating remains “Moderate Buy” with an average price target of $112.56
- Insiders sold approximately 37,245 shares, amounting to around $3.39 million, in the past 90 days
Okta (OKTA) had a tough Friday. The stock dropped 7.7% to close at $75.47, reaching an intraday 52-week low of $75.04. This is far below its 50-day moving average of $88.44.
Volume was also elevated — around 2.83 million shares were traded, about 7% higher than the daily average. The previous close was $81.80, so the movement was sharp and rapid.
What makes this drop a bit confusing is that Okta actually released a solid earnings report. The company reported an EPS of $0.82 for Q3 FY2026, beating the consensus estimate of $0.76. Revenue came in at $742 million, surpassing analyst expectations of $730.23 million and growing 11.6% year-over-year.
A year ago, Okta reported an EPS of $0.67 for the same quarter. That’s a notable improvement.
The company also provided forward guidance, setting FY2026 EPS guidance between $3.43 and $3.44, and Q4 2026 EPS guidance between $0.840 and $0.850.
$1 Billion Buyback Announced
On January 5th, the board approved a $1 billion share repurchase program. This covers roughly 6.8% of the outstanding stock. Management presented this as a sign of confidence that the stock is undervalued.
InvestingPro’s analysis aligns with this view, listing OKTA among its most undervalued stocks. The company has a 77% gross profit margin and achieved 12% revenue growth, with current remaining performance obligations increasing by 13% year-over-year.
Still, the market was not in a buying mood on Friday.
Several analyst firms have recently adjusted their price targets downward. Scotiabank cut its target from $105 to $85, assigning a “sector perform” rating. Barclays moved from $112 to $95 with an “equal weight” rating. Stifel Nicolaus reduced its target from $130 to $121 but kept a “buy” rating.
On a more positive note, Stephens upgraded OKTA from Equal Weight to Overweight, citing AI and cloud adoption trends boosting demand for identity security. DA Davidson retained its Buy rating with a $140 price target. Cantor Fitzgerald maintained an Overweight rating with a $115 target, describing Okta as a “contrarian value play.”
Insider Selling Adds to the Pressure
Insider activity has drawn some attention. CFO Brett Tighe sold 10,000 shares on January 13th at an average price of $95.07, totaling $950,700. This represented a 6.93% reduction in his position.
Insider Eric Robert Kelleher sold 8,370 shares in December at $90.19, cutting his stake by 42.63%.
Overall, insiders have sold 37,245 shares worth approximately $3.39 million in the past 90 days.
Company insiders currently own 5.68% of the stock, while institutional investors hold 86.64%.
Despite the sell-off, the overall analyst consensus remains “Moderate Buy” with an average price target of $112.56 — based on 25 Buy ratings, 12 Holds, and 2 Sells.
Over the past year, OKTA has decreased by roughly 14%, and its market cap is now approximately $13.17 billion.
The stock’s 200-day moving average is $88.79, with the current price well below this level.
