Key Highlights
- The identity management platform reported Q1 FY2027 revenue of $765 million, marking an 11% increase from the prior year and surpassing the Street’s $752 million expectation.
- The company delivered adjusted earnings per share of $0.91, exceeding the $0.85 consensus forecast.
- Shares jumped 30% on May 29 in response to the quarterly report, bringing total gains to 63% since the stock was highlighted as a buy opportunity in February.
- Management increased full-year FY2027 revenue growth projections to 9–10% with adjusted EPS guidance now at $3.79–$3.87.
- Analysts at UBS elevated their OKTA price target to $130 from $115, pointing to expanding opportunities in AI-driven identity solutions.
The identity security company delivered first-quarter fiscal 2027 revenue totaling $765 million. This represents an 11% year-over-year increase and exceeded analyst projections of $752 million.
On the earnings front, adjusted EPS reached $0.91, topping Wall Street’s $0.85 estimate. These impressive results triggered a 30% surge in shares on May 29, following the earnings announcement. The stock has now climbed 63% since early February and has rallied approximately 81% in just the past month.
The wider software industry has also been experiencing a resurgence. The iShares Expanded Tech-Software Sector ETF (IGV) has gained 41% from its 2026 trough, though Okta’s performance has significantly exceeded the sector benchmark.
During the earnings conference call, one subject dominated the conversation: AI agents. Chief Executive Todd McKinnon characterized the early-stage demand for Okta for AI Agents and Auth0 for AI Agents as “bigger than anything we’ve ever seen.”
Chief Financial Officer Brett Tighe noted that multi-cloud AI agent contracts secured to date have exceeded the company’s traditional average transaction size. Corporate clients are prioritizing AI security investments.
Ian Murray, president and portfolio manager at Ten Peak Capital, highlighted McKinnon’s enthusiasm regarding the expanding sales pipeline for AI agent identity solutions. Murray anticipates Okta’s growth trajectory will accelerate during the latter half of 2026 as enterprise customers begin deploying these new capabilities.
Updated Financial Outlook
Okta boosted its full-year FY2027 revenue growth projection to a range of 9% to 10%, an improvement from the previous 9% target. The company also raised its adjusted EPS guidance to $3.79–$3.87, up from a prior midpoint of $3.78.
In the last two months, analyst earnings estimates have shown upward momentum, with two revisions higher and zero downward adjustments for the fiscal year. The consensus full-year EPS estimate edged up from $3.79 to $3.80 during the past 60 days.
Wall Street Perspective
UBS analyst Roger Boyd maintained his buy recommendation while lifting his price objective from $115 to $130. The revised target reflects a 24x multiple applied to Okta’s projected FY2027 free cash flow.
Boyd suggested that the market may be underappreciating the extent to which Okta has broadened its platform to encompass comprehensive identity management capabilities. The company currently carries a Zacks Rank of #2 (Buy) alongside a Momentum Style Score of A.
In the trailing week, OKTA shares advanced 33.64%, compared with a 6.76% increase for the Zacks Security industry. Over the preceding quarter, the stock has surged 75.37%, while the S&P 500 rose 10.8% during the same timeframe.
Okta Identity Governance has evolved from a complementary cross-sell product into a complete standalone offering, now attracting new accounts seeking alternatives to legacy governance platforms.
The current 20-day average trading volume for OKTA stands at 4,231,550 shares.
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