TLDR
- Okta (OKTA) dropped 7.7% on Friday, hitting a 52-week low of $75.04
- Q3 FY2026 earnings beat estimates: EPS of $0.82 vs $0.76 expected, revenue of $742M (up 11.6% YoY)
- Board approved a $1B share buyback program, representing ~6.8% of outstanding stock
- Consensus analyst rating remains “Moderate Buy” with an average price target of $112.56
- Insiders sold roughly 37,245 shares (~$3.39M) over the past 90 days
Okta (OKTA) had a rough Friday. The stock dropped 7.7% to close at $75.47, touching a 52-week low of $75.04 intraday. That’s a long way from its 50-day moving average of $88.44.
Volume was elevated too — around 2.83 million shares traded hands, about 7% above the daily average. The prior close was $81.80, so the move was sharp and fast.
What makes this drop a bit puzzling is that Okta actually delivered a solid earnings report. The company posted EPS of $0.82 for Q3 FY2026, beating the consensus estimate of $0.76. Revenue came in at $742 million, topping analyst expectations of $730.23 million and growing 11.6% year-over-year.
A year ago, Okta reported $0.67 EPS for the same quarter. That’s a decent improvement.
The company also gave forward guidance, setting FY2026 EPS guidance at $3.43–$3.44 and Q4 2026 EPS guidance at $0.840–$0.850.
$1 Billion Buyback Announced
On January 5th, Okta’s board approved a $1 billion share repurchase program. That covers roughly 6.8% of outstanding stock. Management framed it as a signal of confidence that the stock is undervalued.
InvestingPro’s analysis echoes that view, listing OKTA among its most undervalued stocks. The company carries a 77% gross profit margin and posted 12% revenue growth, with current remaining performance obligations up 13% year-over-year.
Still, the market wasn’t in a buying mood Friday.
Several analyst firms have recently trimmed their price targets. 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 the more optimistic side, Stephens upgraded OKTA from Equal Weight to Overweight, citing AI and cloud adoption trends driving identity security demand. DA Davidson held its Buy rating with a $140 price target. Cantor Fitzgerald maintained an Overweight rating with a $115 target, calling Okta a “contrarian value play.”
Insider Selling Adds to the Pressure
Insider activity has caught some attention. CFO Brett Tighe sold 10,000 shares on January 13th at an average price of $95.07, totaling $950,700. That 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%.
In total, insiders have offloaded 37,245 shares worth approximately $3.39 million over the past 90 days.
Company insiders currently own 5.68% of the stock, with institutional investors holding 86.64%.
Despite the selloff, the broader analyst consensus sits at “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 declined roughly 14%, and its market cap now sits at approximately $13.17 billion.
The stock’s 200-day moving average is $88.79, putting the current price well below that level.
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