Okta Inc

Section 1: Company Overview, Shariah Compliance Standards and Fundamentals 

Section 1.1: Okta, Inc. (NASDAQ: OKTA) is an independent identity partner. The Company’s Okta Platform and Auth () Platform enable its customers to securely connect the right people to the right technologies and services at the right time. It offers independent and neutral cloud-based identity solutions that allow customers to integrate with nearly any application, service or cloud that they choose through its platforms.

Kalkine’s ‘The Shariah Compliance Report’ covers the Investment Highlights, Shariah-compliance standards, Key Financial Metrics, Risks, and Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

Section 1.2: What are the Key Metrics for Shariah Compliance to be Considered?

The Shariah Compliance Report aims to identify equities that align with Shariah and ethical principles, providing valuable insights on financial metrics, business activities and compliance with Islamic finance norms. 

Key Shariah Screening Criteria and Thresholds

Shariah Metrics for Okta Inc (NASDAQ: OKTA):

Revenue Segmentation of OKTA in FY26 & Historical Compliance of Financial Ratios:

1.3 The Key Positives, Negatives, and Investment summary   

1.4 Top 10 shareholders:

The top 10 shareholders together form ~41.87% of the total shareholding, signifying concentrated shareholding. The Vanguard Group, Inc., and BlackRock Institutional Trust Company, N.A. are the biggest shareholders, holding the maximum stake in the company at ~10.62% and ~8.92%, respectively.

1.5 Key Metrics:

• Revenue Growth and Scale Expansion: Okta has demonstrated consistent top-line expansion, with revenue increasing from USD 1,300 million in FY2022 to USD 2,919 million in FY2026, reflecting a robust 4-year CAGR of 22.41%. The growth trajectory shows steady deceleration in percentage terms but continued absolute expansion, indicating a transition from hyper-growth toward a more scaled SaaS operating model. Revenue growth remains supported by enterprise adoption, product expansion, and increasing deal sizes, reinforcing Okta’s position as a leading identity security platform.

• Gross Profit Growth and Margin Strengthening: Gross profit has outpaced revenue growth, expanding at a higher 4-year CAGR of 25.72% to USD 2,258 million in FY2026, reflecting strong unit economics. This has translated into a consistent improvement in gross margins from 69.51% in FY2022 to 77.36% in FY2026, indicating increasing operating efficiency, favorable product mix (higher subscription contribution), and scalability benefits. The sustained margin expansion highlights Okta’s ability to extract higher value per dollar of revenue as it matures.
• Profitability Inflection and Operating Leverage: A notable inflection in profitability is evident between FY2025 and FY2026. EBITDA margin improved significantly from 1.30% to 8.50%, while operating margin turned positive from -2.10% to 5.10%, indicating strong operating leverage. This reflects disciplined cost management, improved sales productivity, and better alignment of go-to-market investments with revenue generation. The shift marks Okta’s transition from investment-heavy growth to a more balanced growth-profitability profile.
• Earnings Expansion and Margin Normalization: Pretax margins increased from 1.80% in FY2025 to 8.70% in FY2026, while net margins expanded materially from 1.10% to 8.10%, supported by both operational improvements and a sharp reduction in the effective tax rate from 39.10% to 7.80%. This significant improvement underscores enhanced earnings quality, though part of the expansion is attributable to tax normalization rather than purely operational gains. Nonetheless, the margin profile now aligns more closely with mature SaaS peers.
• Overall Assessment: Transition to Scalable, Profitable Growth Model: Overall, Okta’s financial profile reflects a clear transition from high-growth scaling to a more efficient, profitability-oriented SaaS model. Strong revenue growth, accelerating gross profit expansion, and meaningful margin improvement collectively indicate improving business quality. While growth rates are moderating, the company is increasingly characterized by strong operating leverage, expanding margins, and improving cash generation capacity, positioning it for sustainable long-term value creation.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of FY26:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Technical Summary:

• Prevailing Trend and Moving Average Structure: Okta’s daily chart indicates a broad sideways-to-bearish trend, with the stock currently trading around USD 73.45, below both the 21-day moving average (~USD 77.69) and the 50-day moving average (~USD 81.71). The inability to sustain above these key moving averages reflects persistent medium-term selling pressure and weak trend confirmation. The downward slope of the 50-day moving average further reinforces a lack of bullish momentum, suggesting that the stock remains in a consolidation phase with a negative bias unless it decisively reclaims these resistance levels.
• Momentum Indicators and RSI Dynamics: The Relative Strength Index (RSI) is positioned near 40.8, indicating subdued momentum and proximity to the lower end of the neutral range. While not yet in oversold territory (<30), the RSI suggests weak buying interest and continued downside bias, with no clear bullish divergence visible. This reflects limited momentum reversal signals, implying that any near-term recovery may remain technical rather than trend-changing unless supported by stronger volume and price action.
• Support, Resistance, and Volume Behavior: From a price structure standpoint, immediate support is observed near USD 68.77, representing a critical downside level; a breakdown below this could trigger further declines. On the upside, resistance levels are placed at USD 77.69 (21-DMA) and USD 81.71 (50-DMA), both of which must be breached to signal a potential trend reversal. Trading volumes remain relatively moderate, indicating the absence of strong accumulation; therefore, a sustained increase in volume would be necessary to validate any breakout and shift the current technical outlook toward a more constructive stance.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 27, 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided have been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.