![]() ![]() The key question is how much lower does Okta's multiple have to be for it to be an interesting investment. It has slower revenue growth and a terrible Rule of 40 score and thus deserves a lower multiple. Financials TickerĬomparing the three cloud cybersecurity leaders, it's clear why Okta is the ugly duckling. Let's first take a look at the differences between Okta and its peers to better understand what I mean by execution and quality issues. But if not, then there is no path to profitability or future alpha generation. If Okta can improve its execution, then it's one of the most undervalued stocks in the market today. I think that Okta has the most upside, but also the most downside, of top cybersecurity companies. In this article, I revise my Okta thesis to hold due to a very high uncertainty rating on the stock. It's been a tough ride, with the stock down 71% year to date, although it's somewhat consoling that my other top cybersecurity pick CrowdStrike ( CRWD) is handily outperforming the S&P 500 year to date. I named it one of my top 10 stock picks for 2022 and also recommended the stock to members of Tech Investing Edge, my private investing community. At this point, Okta is a risky bet that will only pay off if management can improve the company's quality. ![]() ![]() Okta ( NASDAQ: NASDAQ: NASDAQ: OKTA) is a leader in the lucrative cybersecurity industry, but multiple execution issues have plagued the company lately. ![]()
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