Okta Inc. shares closed Monday with a modest gain after the identity-management software company scored a double upgrade ahead of earnings following a downgrade of the stock six months ago.
Okta OKTA shares rose 1.2% to $72.26 on Monday after Goldman Sachs analyst Gabriela Borges upgraded the stock two notches to a buy rating from a sell, now that she sees a favorable risk/reward ratio with subscription revenue likely to trough in the second half of the year. “Okta ramps on cross-sell tied to new product cycles such as [Identity Governance and Administration] and [Privileged Access Management],” Borges said. “While we believe competition from Microsoft MSFT will remain an overhang on the stock, we reflect this in our bull case scenario by continuing to discount Okta’s multiple by ~30% relative to peers.”