Okta's Profits Are Up, But Its Credibility Still Hasn't Recovered

"Let's be blunt. When you're selling zero-trust architecture and your own systems get compromised, customers notice. Okta's 2023 breaches exposed customer data and eroded trust at exactly the wrong time. Identity security is a confidence game. You're asking enterprises to hand over the keys to their entire digital kingdom. If you can't protect yourself, why should they trust you with their employees' credentials?"

"Okta is executing. The company just posted its fourth consecutive quarterly earnings beat, with Q3 revenue hitting $742 million and 11.6% growth. More importantly, it swung from chronic losses to profitability in fiscal 2025, with operating margins improving 2,000 basis points year-over-year. Gross margins expanded to 76.3%, the highest in company history. Management announced a $1 billion share buyback in January 2026, signaling confidence that the stock is undervalued."

"The stock got hammered. Over five years, shares are down 66%. That's not just breach fallout. That's a fundamental repricing of what this company is worth when trust becomes a liability instead of an asset. Here's what the market is starting to notice: Okta is executing. The company just posted its fourth consecutive quarterly earnings beat, with Q3 revenue hitting $742 million and 11.6% growth. More importantly, it swung from chronic losses to profitability in fiscal 2025, with operating margins improving 2,000 basis points year-over-year."

Okta suffered two 2023 security breaches that exposed customer data and undermined trust, contributing to a 66% share decline over five years. The company has since shown operational improvement, posting four consecutive quarterly earnings beats and Q3 revenue of $742 million with 11.6% growth. Okta returned to profitability in fiscal 2025, improved operating margins by 2,000 basis points, and expanded gross margins to 76.3%. Management announced a $1 billion buyback in January 2026. Analysts see potential upside, but valuation tension remains as competitors like CrowdStrike expand into identity security.

Read at 24/7 Wall St.