Okta Stock Jumps 30% — Is the AI Identity Play Just Getting Started?

TLDR

• Okta’s Q1 FY2027 revenue came in at $765 million, up 11% year-over-year, beating analyst estimates of $752 million.
• Adjusted EPS of $0.91 topped the consensus estimate of $0.85.
• The stock surged 30% on May 29 following earnings and is up 63% since being flagged as a pick in February.
• Okta raised its full-year FY2027 revenue growth guidance to 9–10% and adjusted EPS forecast to $3.79–$3.87.
• UBS raised its price target on OKTA to $130, citing the AI identity management opportunity.

Okta posted revenue of $765 million for its fiscal first quarter of 2027. That’s an 11% jump year-over-year and ahead of Wall Street’s estimate of $752 million.

Okta, Inc., OKTA

Adjusted EPS came in at $0.91, beating the consensus of $0.85. The strong numbers sent the stock up 30% on May 29, the day after earnings were released. OKTA is now up 63% since early February and up roughly 81% over the past month.

The broader software sector has also been recovering. The iShares Expanded Tech-Software Sector ETF (IGV) is up 41% from its 2026 low, but Okta has outpaced the group.

The earnings call had a clear theme: AI agents. CEO Todd McKinnon described early pipeline interest for Okta for AI Agents and Auth0 for AI Agents as “bigger than anything we’ve ever seen.”

CFO Brett Tighe added that the multi-cloud AI agent deals closed so far have been larger than the company’s historic average deal size. Enterprise customers are treating AI security as a priority spend.

Ian Murray, president and portfolio manager at Ten Peak Capital, said what stood out was McKinnon’s optimism around the growing pipeline for AI agent identity management. He expects Okta’s growth to pick up pace in the second half of 2026 as clients start adopting these offerings.

Guidance Raised

Okta lifted its full-year FY2027 revenue growth forecast to between 9% and 10%, up from a prior target of 9%. The adjusted EPS outlook was raised to $3.79–$3.87, compared with a prior midpoint of $3.78.

Over the past two months, two earnings estimates moved higher and none moved lower for the full year. The consensus EPS estimate for the full year ticked up from $3.79 to $3.80 in the past 60 days.

Analyst View

UBS analyst Roger Boyd reiterated a buy rating and raised his price target from $115 to $130. The new target is based on a 24x multiple of Okta’s estimated FY2027 free cash flow.

Boyd said investors may be underestimating how far Okta has expanded its platform to cover all areas of identity. Okta currently holds a Zacks Rank of #2 (Buy) with a Momentum Style Score of A.

Over the past week, OKTA is up 33.64%, compared to a 6.76% gain for the Zacks Security industry. Over the past quarter, the stock is up 75.37%, against a 10.8% move in the S&P 500 over the same period.

Okta Identity Governance has also shifted from a cross-sell add-on into a standalone product, now winning new customers looking to move off legacy governance vendors.

The 20-day average trading volume for OKTA currently sits at 4,231,550.

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