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A Guggenheim analyst upgraded shares of Okta, Inc. (NASDAQ:OKTA) to Neutral from Sell, lowering the price target to $65 from $75 per share in a note Friday.
Even so, the analyst said the company is in “disarray.”
“The integration of Auth0 is not going well, sales force attrition is at historically high levels, new product launches have been delayed, there have been a slew of negative headlines around security incidents, its co-founder and COO is taking a year sabbatical, and its chief product officer is departing: when it rains, it pours,” declared the analyst.
However, he acknowledged that the opportunity in front of the company is “massive, and in some cases, untapped.”
“Execution clearly needs to improve for the company to capture this large and emerging opportunity. While these improvements will likely not be a one (or two or three…)-quarter event – with more than one-third of the company’s value lost in one day and with the stock trading at 5.3x EV/NTM recurring revenue … enough is enough,” added the analyst, who concluded that while they recognize they might be early, they see execution issues and bad news as now priced.
