Key Takeaways for Okta Stock
- Revenue grew 11% year-over-year to $765.0 million in Q1 FY2027, beating analyst consensus estimates.
- GAAP operating margins reached 7% in the quarter ended April 30, 2026, up from negative territory two years prior.
- New products represented approximately 25% of Q1 bookings, with AI agent deals carrying deal sizes roughly 40% larger than non-AI deals.
- TIKR’s mid-case values Okta stock at approximately $203 by January 2031, implying around 77% total return from the current price of $115.
Okta Stock Posts 11% Revenue Growth as Operating Leverage Arrives and Agents Change the Addressable Market
Okta, Inc. (OKTA), the leading independent identity security platform serving more than 20,000 enterprise customers, reported Q1 FY2027 revenue of $765.0 million on May 28, following a quarter in which both product execution and go-to-market discipline came together in a way the income statement makes hard to dismiss.
The revenue figure cleared analyst consensus by nearly 2%, driven entirely by the subscription business, which grew 11% year-over-year to $750.0 million.
Current remaining performance obligations, a forward-looking measure of contracted subscription backlog expected to be recognized over the next 12 months, grew 12% year-over-year, while total RPO grew 16%.
Net revenue retention ticked up to 107% from 106% the prior quarter, the first sequential increase in several periods, reflecting cross-sell momentum across Identity Governance and the early pull of AI agent conversations into core platform expansions.
CEO Todd McKinnon tied the improvement directly to the agentic identity opportunity in the Q1 earnings call and said: “If you look at our 12% revenue growth, you look at net retention inflecting up to 107, cRPO of 12%, that’s being driven by Okta being put in a more strategic light because of this thought leadership in AI.”
The new product portfolio is now at scale as a bookings contributor, representing approximately 25% of Q1 bookings, a meaningful increase from the prior year, with Identity Governance cited as the leading driver and Privileged Access growing behind it.
Okta for AI Agents reached general availability on April 30, 2026, weeks before the earnings call, with Auth0 for AI Agents having launched in November 2025. Neither contributed materially to Q1 revenue, but both generated what McKinnon described as the largest pipeline the company has seen for any new product.
The go-to-market changes implemented a year ago, including the separation of Okta sellers targeting IT and security buyers from Auth0 sellers targeting developers, have stabilized into a model producing lower account executive attrition and higher sales productivity than prior periods.
Partner-sourced bookings grew meaningfully in the quarter, including multiple million-dollar-plus deals, an early validation of the decision to redirect professional services resources toward partner enablement and global systems integrators.
Okta Stock’s Operating Leverage Has Arrived. The Question Is How Far It Runs.
Okta stock’s operating margin story over the past eight quarters is the clearest evidence that the cost structure transformation is real and not cyclical.
Operating margins were negative 3% in the quarter ended July 31, 2024, and negative 2% in the quarter ended October 31, 2024, then crossed into positive territory at 3% by January 31, 2025 before reaching 7% in the most recent quarter ended April 30, 2026.
Gross margins have been the stable floor throughout this transformation, holding in a tight range from 76% to 78% across all eight quarters shown, while cost of goods sold held steady at $0.17 billion per quarter over the most recent four periods.
The operating leverage mechanism is in the SG&A and R&D lines: total operating expenses ran at $0.51 billion in the July 2024 quarter against $0.65 billion in revenue, while by April 2026 they held flat at $0.54 billion against $0.77 billion in revenue, compressing the operating expense ratio significantly as revenue scaled.
R&D expenses stayed nearly constant across the full eight-quarter span, moving from $0.16 billion to $0.16 billion, meaning Okta has maintained its innovation investment envelope while revenue grew 18% from $0.65 billion to $0.77 billion.
Okta Stock Leads Palo Alto and CrowdStrike on Operating Margin Recovery, But the Gap Reveals Where the Real Work Starts
Okta stock’s GAAP operating margin of 7% in the quarter ended April 30, 2026, sits 8 percentage points above CrowdStrike’s (CRWD) negative 2% in the same period, marking the first time in the eight-quarter span shown where Okta has moved ahead of a direct cybersecurity peer on this metric.
Palo Alto Networks (PANW) has held operating margins above 9% in every quarter since April 2025, reaching 16% by January 2026 before pulling back to negative territory by April 2026, a profile that reflects a more mature cost structure but also the volatility that comes with a larger, more complex operating base.
CrowdStrike has traded between negative 11% and positive 1% across the full eight quarters, never establishing the kind of consistent positive operating margin that both Okta and Palo Alto have now achieved, which places Okta’s 7% current reading in a competitive context that actually flatters the recovery story the income statement tells.
Is Okta Stock Undervalued in 2026? TIKR’s $151 Near-Term Target and $203 Long-Range Model Say It Depends on Growth
TIKR’s mid-case values Okta stock at approximately $203 by January 2031, implying around 77% total return from the current price of $115, or roughly 7% annualized over approximately 4.6 years.
If Okta executes on the TIKR mid-case assumptions, including revenue growth around 9% annually and net income margins expanding toward approximately 23%, the business reaches the model target with a compounding operating leverage story that the transcript now supports in nascent form.
The bear case, with revenue growth near 8% and margins around 22%, still produces approximately $154 per share by January 2031, or roughly 34% total return at around 4% annualized.
The bull case, with growth near 10% and margins near 25%, reaches approximately $260, or around 126% total return at roughly 10% annualized over the same period, a scenario that requires the AI agent pipeline to begin converting into contracted revenue at scale across multiple fiscal quarters.
Is Okta Stock a Buy Right Now?
Okta stock is currently priced at $115, against TIKR’s mid-case target of approximately $203 by January 2031.
The base case implies around 77% total return over roughly 4.6 years, or approximately 7% annualized.
Whether that return is sufficient depends on the investor’s required rate and conviction that 9% revenue growth holds through a period when AI agent revenue is not yet material in the model.
What Did Okta Say About AI Agents on the Q1 2027 Earnings Call?
Okta for AI Agents became generally available on April 30, 2026, and was not a material revenue contributor in Q1, but generated what management described as the largest product pipeline in company history.
CEO Todd McKinnon noted that the average deal size for AI-specific transactions is significantly larger than non-AI deals, and that new products represented approximately 25% of Q1 bookings.
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