This Cloud Security Company Got Attractive As Its Peers Went Private, Analyst Upgrades Stock

  • Guggenheim analyst John Difucci upgraded Okta Inc OKTA from Neutral to Buy with a $65 price target.
  • While he recognized the company is facing challenges that could take several quarters to address effectively, he found current valuation levels too compelling to ignore. 
  • He believed the stock is currently trading below the intrinsic value of a typical Software company assuming no growth or declines and more than pricing in issues surrounding salesforce attrition, product delays, C-suite turnover, and negative headlines concerning security incidents. 
  • Also Read: Okta Analyst Knocks Off Price Target By 13%, Courtesy Microsoft
  • Okta was viewed as the premier asset in the Access Management space, and competitors in the space – ForgeRock, Inc FORG and Ping Identity Holding Corp were taken private. 
  • While his upgrade is not necessarily based on the potential of a similar outcome for OKTA, he saw current levels offering asymmetrical risk and reward with little downside and significant upside potential.
  • Morgan Stanley analyst Hamza Fodderwala maintained Okta with an Equal-Weight and lowered the price target from $93 to $65.
  • Price Action: OKTA shares traded higher by 0.67% at $45.32 on the last check Monday.
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