Here's Why Okta (OKTA) Fell More Than Broader Market

Okta (OKTA) closed at $74.45 in the latest trading session, marking a -1.68% move from the prior day. This change lagged the S&P 500's 0.02% loss on the day. Meanwhile, the Dow gained 0.38%, and the Nasdaq, a tech-heavy index, added 0.04%.

Heading into today, shares of the cloud identity management company had gained 2.48% over the past month, lagging the Computer and Technology sector's gain of 4.44% and the S&P 500's gain of 3.77% in that time.

The investment community will be closely monitoring the performance of Okta in its forthcoming earnings report. The company is predicted to post an EPS of $0.57, indicating a 29.55% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $649.35 million, up 11.19% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $2.61 per share and a revenue of $2.56 billion, indicating changes of +63.13% and +13.19%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Okta. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 113.63% upward. Okta currently has a Zacks Rank of #1 (Strong Buy).

In the context of valuation, Okta is at present trading with a Forward P/E ratio of 29.07. This denotes a premium relative to the industry's average Forward P/E of 17.59.

Investors should also note that OKTA has a PEG ratio of 1.26 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. OKTA's industry had an average PEG ratio of 1.58 as of yesterday's close.

The Internet - Software and Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 105, which puts it in the top 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.