Okta Inc OKTA shares are trading higher after Goldman Sachs analyst Gabriela Borges raised their rating to Buy from Sell at an increased price target of $91 from $77.
The analyst expects cRPO and ARR to accelerate back to the 15%-20% range following cRPO deceleration in the past several quarters.
The analyst expects acceleration in the Customer Identity segment, stabilization of the Workforce segment, and ramp-up on cross-selling related to new product cycles such as IGA and PAM.
The analyst expects a convergence between IAM, Identity Governance (IGA), and Privileged Access Management (PAM), seeing an opportunity to sell an integrated suite of these products successfully.
Borges projects customer IAM business to grow at a 23% CAGR from 2023-2026, driving 10 pts of the total revenue growth. The analyst projects around $33 million in revenue from these products in 2024 (FY25).
The analyst expects subscription revenue acceleration to 15-20% in 2024 (FY25) from 14% in H2 (FY24).
However, Borges expects headwinds related to layoffs and pressurized monthly active users to weigh on NRR through H2 FY23.
Price Action: OKTA shares are up 4.13% at $74.35 on the last check Monday.
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