Why Okta Stock Jumped Friday

MarketsMotley Fool

What happened

Shares of enterprise identity-management company Okta (NASDAQ: OKTA) jumped on Friday, rising as much as 12.5%. As of 2:11 p.m. EDT, the stock was up 7.1%.

Continue Reading Below

The stock's gain follows Okta's better-than-expected financial results for its first quarter of fiscal 2020. Revenue, in particular, crushed analysts' expectations.

So what

Okta reported revenue of $125 million, up 50% year over year. On average, analysts were expecting revenue of about $117 million. Okta's non-GAAP (generally accepted accounting principles) net loss per share was $0.19, beating an average analyst estimate for a net loss per share of $0.21.

Continued momentum was driven by a 52% year-over-year increase in revenue. Subscription revenue accounted for 94% of the company's revenue during the quarter. An "acceleration with enterprise customers" served as a key catalyst for subscription revenue, said Okta CEO Todd McKinnon in the company's fiscal first-quarter earnings release.

Now what

McKinnon believes the company is positioned to "continue executing on our significant and growing market opportunities."

Management forecast fiscal second-quarter revenue to be between $130 million and $131 million, for year-over-year growth of 37% to 38%. In addition, Okta guided for non-GAAP earnings per share during the period to be between a loss of $0.11 and a loss of $0.10.

10 stocks we like better than OktaWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Okta wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Okta. The Motley Fool has a disclosure policy.