Okta shares climbed 21.5% on Thursday to $163.37 after the identity and access management company delivered a second-quarter fiscal 2027 earnings report that beat Wall Street estimates across the board.

Okta's software controls how employees and customers sign in to corporate applications, putting it in direct competition with Microsoft's Entra ID suite and CyberArk in the identity security market. The category has remained a priority for enterprise security budgets because compromised credentials are among the most common ways attackers gain access to organizations, a dynamic that keeps investors focused on Okta's bookings and backlog metrics as a read on demand.

Okta, Inc. (NASDAQ: OKTA) reported adjusted earnings per share of $1.05 for the quarter, ahead of the $0.96 consensus estimate. Revenue came in at $805 million, up 10.6% year over year and above the $793 million analysts had expected.

The bookings performance stood out. Okta recorded its strongest bookings for any non-fourth-quarter period on record, while current remaining performance obligations (cRPO) grew 14.1% year over year, an acceleration of nearly 2 percentage points from the prior quarter. cRPO is closely watched because it tends to lead revenue growth, and the acceleration gave analysts reason to expect continued momentum heading into the third quarter.

Okta also raised its full-year fiscal 2027 guidance by twice the size of its Q2 beat. The company now expects full-year adjusted EPS of $3.90 to $3.94 and set Q3 EPS guidance of $0.92 to $0.94. Okta's fiscal year runs through January 31, so the reported quarter covered May through July and its fiscal third quarter closes October 31, the next scheduled checkpoint for whether the bookings acceleration carries into reported results.

Analysts Lift Price Targets

The earnings report triggered a wave of price target increases. Oppenheimer raised its target from $170 to $190 and maintained an Outperform rating. KeyBanc moved its target to $190, citing the $76 million beat on cRPO versus expectations. RBC Capital set a target of $195, while DA Davidson also moved to $190.

Bernstein raised its target to $143 from $141, keeping an Outperform rating, and noted the quarter "finally showed what we've been long waiting for" in terms of subscription growth and cRPO acceleration. Piper Sandler lifted its target to $160, and Citi set a new target of $165.

The stock currently carries a consensus Moderate Buy rating, with an average target price of $164.57. Of the analysts covering Okta, 33 rate the stock a Buy and nine rate it a Hold.

Okta has a gross profit margin of 77% and a market capitalization of $28.4 billion. Its 50-day moving average sits at $139.27, and the 12-month high is $168.50.

Insider Selling Continues

Despite the bullish analyst sentiment, insiders have been selling. Over the past 90 days, insiders sold roughly 165,000 units of stock valued at approximately $21.8 million.

CFO Brett Tighe sold 65,000 units in June at an average price of $117.25, while insider Eric Kelleher sold just under 4,000 units at $114.10 during the same month. Both transactions were executed under pre-arranged Rule 10b5-1 trading plans, which allow insiders to schedule sales in advance and are designed to avoid trading on the basis of material nonpublic information.

Institutional investors hold 86.64% of the stock. In Q2, the California State Teachers Retirement System increased its position by more than 13,000% and now holds over 36 million units valued at roughly $4.95 billion.

Okta's price-to-earnings ratio stands at 119.13. InvestingPro's Fair Value analysis indicates the stock may be overvalued at current levels.

The 12-month low was $62.66, and following Thursday's move the stock has more than doubled from that level.

Source: CoinCentral