The shares of this recent IPO were just initiated at both Oppenheimer and William Blair with an ‘Outperform’ rating.
Okta, Inc. (OKTA)
From Crisis and Opportunity
Okta, Inc. (OKTA) offers six solutions that support “extended enterprises” or, in layman’s terms, manages contractors and suppliers that need secure access to enterprise services but also use personal, unsecured devices.
Its clients include Twilio, Pitney Bowes, MGM Resorts, MassMutual, LinkedIn, GitHub, Flex Ltd., Engie, Adobe, and 20th Century Fox. Okta also maintains partnerships with leading cloud vendors, including Workday, ServiceNow, SAP SE, NetSuite, Microsoft, Google Cloud, Box, and Amazon Web Services.
As you can see from the chart, Okta went public last April, got a nice following on the market, and then sold off with a big volume spike as insiders cashed in. And the smart money started buying.
The company has a market cap of $2.68 billion, quarterly revenue growth is 62.90%, and the company has no earnings.
It should also be noted that the float jumped by 79 million shares on October 4th. Most analysts think that this means people will sell. And yes, as we’ve seen from the chart, there is a dip. That being said, everyone knew this would happen. It’s already priced in. The dip was bought heavily.
After researching hundreds of these unlock events (going back 30 years), I found that, in the vast majority of cases, the shares move higher in the three months after the lock-up expires.
Given the lack of pure plays on cloud stocks and the current melt up of the stock market, Okta is a nice buy.
Okta is a “Buy” under $28.50. It’s currently trading at $27.94, so put your stop-loss in at $22 with a six-month price target of $40.
Christian DeHaemer, Crisis and Opportunity, www.angelpub.com, 877-303-4529, October 6, 2017