SAN FRANCISCO, May 26, 2026, 07:03 PDT
- Arete upgraded Okta to Buy from Sell and raised its price target to $127, up from $83.
- The call is coming two days ahead of Okta’s fiscal first-quarter earnings report.
- Investors are looking to see if AI agents will turn into an actual demand driver for identity-security software.
Arete Research upgraded Okta twice on Tuesday, moving it to Buy from Sell and lifting its price target to $127 from $83 ahead of Okta’s earnings this week. Shares gained about 0.7% to $92.89 in early Nasdaq trading.
Okta is due to report fiscal Q1 results after the U.S. close on May 28. The stock now trades as a way for Wall Street to judge if AI agents will hurt software sellers or drive higher security budgets. Timing is crucial.
Arete analyst Ellie Kearney said a “modest beat-and-raise” quarter, thanks to support from agentic AI, would be a “clear catalyst” for the stock. Agentic AI is software able to operate across systems with less human oversight, raising the need to manage what such agents can reach. TipRanks
Okta is projected to deliver adjusted earnings of 85 cents per share and revenue of $751.8 million for the quarter, according to consensus from 42 analysts tracked by AlphaStreet. Revenue estimates come in a narrow band, between $749.9 million and $762.9 million, which reduces the margin for surprises in the results.
Wells Fargo bumped its Okta price target up to $85 from $76 last week, holding onto its “equal weight” call. MarketBeat shows the stock with a Moderate Buy consensus now—30 Buys, nine Holds, two Sells. MarketBeat
Analyst consensus fair value on Okta is now about $101, up $1, according to Simply Wall St’s May 24 community narrative update. Bulls say security demand is holding up, buying is getting better, and AI-agent and identity tools may lift profit. Bears keep pressing on growth staying power and valuation.
Okta’s March numbers handed out some talking points to bulls and bears. The company posted a fourth-quarter revenue jump of 11% to $761 million, with subscription revenue up the same amount. For the first quarter, Okta said revenue should come in between $749 million and $753 million, putting growth at about 9%. Current remaining performance obligations, the subscription backlog due in the next 12 months, are seen rising 10%.
Okta CEO Todd McKinnon is looking to AI for the company’s next chapter. “AI is redefining the future of software and creating a critical need to secure AI agents,” McKinnon said in the company’s March earnings release. Okta Investor Relations
Some outside backers are on board with the idea. Okta last week said Forrester called it a leader in workforce identity security and noted Okta’s AI-agent governance roadmap. Forrester also wrote separately that identity platforms have to manage machine and AI-agent identity governance, handle short-lived credentials, and track agent actions all the time.
The competitive picture is moving as well. Last week, Reuters said software stocks were bouncing as investors took another look at AI risks. Cybersecurity stocks like CrowdStrike, Okta, SailPoint and Zscaler traded higher. “The market is drawing a clear line” between traditional per-seat software and companies tied to the AI buildout, Anthony Saglimbene from Ameriprise Financial said to Reuters. Reuters
But there is a clear risk: the AI-agent theme might take too long to drive billings. Back in March, Reuters said Okta was looking for its slowest growth since its 2017 IPO, as enterprise clients slowed spending and took a hard look at budgets. Okta’s first-quarter revenue forecast was also set below the consensus estimate at the time.
That puts extra pressure on Thursday’s report. If Okta posts a clear beat, Arete’s downgrade may look premature. But if management stays cautious, old doubts about Okta as an unfinished software firm using AI buzz could come back.
