What happened

Shares of cloud-based identity-management specialist Okta (NASDAQ:OKTA) rose 149.1% higher in 2018, according to data from S&P Global Market Intelligence. The company, which entered the public stock market as recently as the spring of 2017, kept climbing closer and closer to profitability on the back of fantastic revenue growth.

So what

The company did achieve a breakeven bottom-line result in the third quarter of fiscal year 2019, which was reported in early December. At the same time, top-line sales surged 55% higher year over year to land at $106 million. Okta has yet to publish an earnings report that didn't crush Wall Street's earnings expectations, and that's only even more true for the company's revenue performances.

Close-up shot of a few pixelated padlocks. Most of them are blue and closed; one is red and open.

Image source: Getty Images.

Now what

Okta is carving out a unique niche in the computer security market with a laser-focused emphasis on authentication and logins. I see no reason the company's rampant growth would slow down significantly in the foreseeable future since a revenue run-rate of roughly $400 million per year is just a microscopic sliver of the available multibillion-dollar target market. For the moment, it's all about that juicy revenue growth; sustained profits will come later.

The $7.8 billion valuation might be a bit of a stretch, given Okta's slim revenues and mostly negative profits, but those are often the stakes for high-growth investment opportunities. Whether Okta crushes the market in 2019 or not, there's an undeniable wealth of long-term growth potential here.

Check out the latest Okta earnings call transcript.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.