This cybersecurity company is expected to grow by 53.2% this year.
Okta, Inc. (OKTA)
From Cabot Growth Investor
Okta, Inc. (OKTA) has looked like a real leader during the past few weeks, as it was one of the first to break out on the upside following the market bottom and has shown little inclination to retreat ever since.
And, fundamentally, there’s plenty of reason for that strength. We see Okta as a new-age cybersecurity leader, with its identity access management (IAM for short) solutions in huge demand as corporate data moves to the cloud; as access to that data comes from a greater number of devices (desktops, tablets, smartphones); and as workforces become more mobile.
Revenues have been growing rapidly and consistently (between 57% to 61% each of the past six quarters), and while earnings are in the red, free cash flow is picking up (positive last quarter).
Back to the stock, the action has been impressive, but it’s a bit extended to the upside, and earnings are due out in three weeks (March 7). We’ve been patiently waiting for a shakeout or some tightness to get in, and that could still come—but given that we think we’re still early in a sustained market advance, we’re unwilling to just watch and wait, either. Thus, we’ll buy a half-sized position tonight (5% of the portfolio), with the idea of adding the other half if the stock continues to act well.
Michael Cintolo, Cabot Growth Investor, www.cabotwealth.com, 978-745-5532, February 14, 2019