Okta, Inc.
Okta, Inc. Fundamental Analysis
Okta, Inc. (OKTA) shows weak financial fundamentals with a PE ratio of 66.78, profit margin of 6.87%, and ROE of 2.93%. The company generates $2.7B in annual revenue with strong year-over-year growth of 21.80%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 62.1/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze OKTA's fundamental strength across five key dimensions:
Efficiency Score
WeakOKTA struggles to generate sufficient returns from assets.
Valuation Score
WeakOKTA trades at a premium to fair value.
Growth Score
ExcellentOKTA delivers strong and consistent growth momentum.
Financial Health Score
ExcellentOKTA maintains a strong and stable balance sheet.
Profitability Score
ModerateOKTA maintains healthy but balanced margins.
Key Financial Metrics
Is OKTA Expensive or Cheap?
P/E Ratio
OKTA trades at 66.78 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, OKTA's PEG of 4.27 indicates potential overvaluation.
Price to Book
The market values Okta, Inc. at 1.89 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 40.51 times EBITDA. This signals the market has high growth expectations.
How Well Does OKTA Make Money?
Net Profit Margin
For every $100 in sales, Okta, Inc. keeps $6.87 as profit after all expenses.
Operating Margin
Core operations generate 3.91 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $2.93 in profit for every $100 of shareholder equity.
ROA
Okta, Inc. generates $2.11 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Okta, Inc. generates strong operating cash flow of $881.12M, reflecting robust business health.
Free Cash Flow
Okta, Inc. generates strong free cash flow of $867.59M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.12 in free cash annually.
FCF Yield
OKTA converts 7.16% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
66.78
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
4.27
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.89
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.43
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.06
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.39
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.03
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How OKTA Stacks Against Its Sector Peers
| Metric | OKTA Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 66.78 | 35.19 | Worse (Expensive) |
| ROE | 2.93% | 1155.00% | Weak |
| Net Margin | 6.87% | -127067.00% (disorted) | Weak |
| Debt/Equity | 0.06 | 0.41 | Strong (Low Leverage) |
| Current Ratio | 1.39 | 4.71 | Neutral |
| ROA | 2.11% | -314918.00% (disorted) | Weak |
OKTA outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Okta, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
272.38%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
-85.84%
Industry Style: Growth, Innovation, High Beta
DecliningFCF CAGR
2117.06%
Industry Style: Growth, Innovation, High Beta
High Growth