Please ensure Javascript is enabled for purposes of website accessibility

Why Okta Stock Jumped Friday

By Daniel Sparks - May 31, 2019 at 2:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Revenue soared past analysts' estimates.

What happened

Shares of enterprise identity-management company Okta (OKTA 5.41%) jumped on Friday, rising as much as 12.5%. As of 2:11 p.m. EDT, the stock was up 7.1%.

The stock's gain follows Okta's better-than-expected financial results for its first quarter of fiscal 2020. Revenue, in particular, crushed analysts' expectations.

A person logging into a laptop with a lock displayed on-screen

Image source: Getty Images.

So what

Okta reported revenue of $125 million, up 50% year over year. On average, analysts were expecting revenue of about $117 million. Okta's non-GAAP (generally accepted accounting principles) net loss per share was $0.19, beating an average analyst estimate for a net loss per share of $0.21.

Continued momentum was driven by a 52% year-over-year increase in revenue. Subscription revenue accounted for 94% of the company's revenue during the quarter. An "acceleration with enterprise customers" served as a key catalyst for subscription revenue, said Okta CEO Todd McKinnon in the company's fiscal first-quarter earnings release.

Now what

McKinnon believes the company is positioned to "continue executing on our significant and growing market opportunities."

Management forecast fiscal second-quarter revenue to be between $130 million and $131 million, for year-over-year growth of 37% to 38%. In addition, Okta guided for non-GAAP earnings per share during the period to be between a loss of $0.11 and a loss of $0.10.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Okta Stock Quote
Okta
OKTA
$83.03 (5.41%) $4.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
327%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.