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Okta (OKTA) Dips More Than Broader Markets: What You Should Know

Okta (OKTA) closed the most recent trading day at $76.34, moving -1.46% from the previous trading session. This change lagged the S&P 500's 0.61% loss on the day. At the same time, the Dow lost 0.1%, and the tech-heavy Nasdaq lost 0.67%.

Heading into today, shares of the cloud identity management company had gained 13.88% over the past month, lagging the Computer and Technology sector's gain of 17.44% and outpacing the S&P 500's gain of 8.32% in that time.

Okta will be looking to display strength as it nears its next earnings release, which is expected to be March 1, 2023. In that report, analysts expect Okta to post earnings of $0.10 per share. This would mark year-over-year growth of 155.56%. Meanwhile, our latest consensus estimate is calling for revenue of $488.99 million, up 27.67% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for Okta. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.63% higher. Okta is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that Okta has a Forward P/E ratio of 241.02 right now. Its industry sports an average Forward P/E of 20.43, so we one might conclude that Okta is trading at a premium comparatively.

We can also see that OKTA currently has a PEG ratio of 9.64. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OKTA's industry had an average PEG ratio of 5.51 as of yesterday's close.

The Internet - Software and Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 65, putting it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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