The identity management service company Okta Inc. (OKTA) posted strong earnings last week, beating expectations on billings and raising its revenue guidance. Following the earnings release, Gray Powell of BTIG published a report and maintained a Buy rating on the stock. Powell assigned a price target of $280, reflecting a 12-month upside potential of approximately 28%. (see OKTA stock analysis on TipRanks)

Powell described several upsides to the company, including recent developments from the Biden administration that “the government must move toward a zero-trust architecture and government agencies must adopt multi factor authentication.” Okta has continued to strike deals with the United States government and its growth is exponential.

Okta also increased its revenue guidance and expects 35% growth for the next five years. However, Powell also expressed some downsides.

Firstly, Okta’s report did not make it clear how its recently acquired software Auth0 will factor into the company’s future growth. Powell noted that acquisition losses from Auth0 were greater than anticipated. Additionally, after three months on the job, the CFO is departing from the company, which could stir anxiety among investors.

When providing his thesis, Powell was positive about the company, stating “OKTA is dominating its target market and successfully expanding into natural adjacencies.”

Consensus among analysts on TipRanks is a Moderate Buy based on 10 Buy and 7 Hold ratings. The average analyst price target of $275.06 per share implies approximately 26% upside potential over the next 12 months.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.