Okta Inc. (NASDAQ:OKTA) saw its share price climb to a new four-year high on Thursday after reporting a strong earnings performance in the second quarter of fiscal year 2027, which showed that the company is reaping huge returns from the booming artificial intelligence industry.
In intraday trading, the stock climbed to a record high of $174.85 before paring gains to finish the session just up by 28.63 percent at $172.91 apiece.
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Profits Jump 73%
Net income during the period ended at $116 million, up from $67 million net income in the second quarter of fiscal year 2026.
Total revenues, on the other hand, increased by 10.6 percent to $805 million from $723 million year-on-year, with subscription revenues attributed to the largest chunk at $793 million, or 11.5 percent higher than $711 million in the same comparable period.
“Our Q2 performance was highlighted by accelerating cRPO (current Remaining Performance Obligations), success with our largest customers, and strong profitability and cash flow,” Okta Inc. (NASDAQ:OKTA) Chief Finance Officer Brett Tighe said.
“Steady momentum from core Okta workforce and customer identity drove ACV (annual contract value) acceleration in both businesses. Topline growth also benefited from strong contributions from our portfolio of new products, led by Okta Identity Governance,” he noted.
Price Target Upgrades
Following the results, 18 investment companies raised their price targets to a range of $145 to $200.
Needham, Truist Securities, and Cantor Fitzgerald all issued the highest price target of $200, while reiterating their buy and overweight ratings on the stock.
RBC Capital followed with a $195 price target, while DA Davidson, Scotiabank, Oppenheimer, and KeyBanc all raised their price targets to $190.
Guggenheim gave a $188 price target with a buy call, while BMO Capital upgraded the stock to $187 from $168 with an outperform rating.
Other firms also issued price targets ranging from $143 to $180, including Canaccord, Citigroup, Mizuho, Bernstein, Piper Sandler, TD Cowen, Stifel, and Citizens.
Hedge Fund Positioning, Conviction Up in Q2
More institutional investors are buying into Okta Inc.’s (NASDAQ:OKTA) long-term growth prospects, as evidenced by the increase in companies establishing their positions, alongside their committed capital.
Data from Insider Monkey showed that 58 hedge funds held positions in the company as of the second quarter of the year, up from 49 in the quarter previously.
More notably, conviction strengthened by 36 percent to $1.768 billion from $1.3 billion quarter-on-quarter, signaling that institutional managers are increasingly bullish on the security software provider’s growth trajectory.
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