Identity management products and services provider Okta, Inc. (NASDAQ:OKTA)’s shares are among the top performers in the market as they are up by more than 120% year-to-date. With the firm placed comfortably in the software industry, unsurprisingly, the narrative is all about AI and the role that it can play in the firm’s operations. Cramer discussed Okta, Inc. (NASDAQ:OKTA) in his morning appearance on September 18th and discussed the firm in the context of broader security concerns about AI:
“I do think the most important interview I had was with the fellow by the name Todd McKinnon, who’s one of the least promotional people on Earth. He’s Okta. He said, look, all we have to do, is identify. Once we identify, we know everything they do. If something’s doing something nefarious, of which we know, then we’ll stop it. We can stop it. . .we know what it’s doing, we can kill it.”
For Okta, Inc., the growth aspect has seen the firm lag behind peers such as CrowdStrike and Zscaler. The firm’s second quarter revenue grew by 11% annually, which was lighter than CrowdStrike and Zscaler’s 26%. Similarly, the firm guided 10% to 11% annual revenue growth for its fiscal year 2027, while CrowdStrike and Zscaler guided 24.5% to 24.9% and 16.6% to 17.5%.
Additionally, unlike CrowdStrike, whose revenue from AI platforms appears to be doing well, Okta, Inc. lags on this front. The firm’s second quarter results saw management outline that revenue from AI was “very early.” With AI playing a major role in software firms, including ServiceNow and Palo Alto, naturally, Okta, Inc. could experience tailwinds from it. On this front, September has been an important month for the firm. It has announced Okta for AI agents and extended the Identity Governance platform to include AI agents as well. Looking at Cramer’s comments, it appears that Okta, Inc.’s CEO is quite confident about the capabilities of the new products. Additionally, with reports of rogue AI agents quite common, it’s unsurprising that he mentioned the firm.
Financially, Okta, Inc. reported having more than 605 customers with more than $1 million in annual contract value (ACV) in its second quarter. The firm also experienced tailwinds from new products, as not only did they represent 30% of Q2 bookings but also drove ACV higher by 40% to indicate strong market penetration and happy customers. Considering this, CEO Todd McKinnon’s optimism does look to be warranted. RPO growth also outpaced revenue growth and sat at 14%.
Looking at Okta, Inc.’s valuation, the forward P/E ratio of 48.31 is significantly lower than CrowdStrike’s 188 and higher than Zscaler’s 40. 52 out of the 1,006 hedge funds tracked by Insider Monkey had disclosed a stake in the firm in Q2, which is lower than CrowdStrike’s 89 and similar to Zscaler’s 52. Short interest as a percentage of float is higher than CrowdStrike and lower than Zscaler.
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