OKTA Stock Slips Premarket: Piper Sandler Cuts Price Target On Signs Of Slowing Growth

• Piper Sandler said growth in contract‑valued backlog (cRPO) slowed, and subscription‑revenue expansion lost steam.
• The firm slashed the price target to $95 from $110. 
• Okta reported Q3 revenue of $742 million and adjusted earnings per share of $0.82.

Okta Inc. (OKTA) has drawn scrutiny from Piper Sandler after its third‑quarter earnings prompted the firm to reduce the 12‑month price target to $95 from $110. 

Okta’s stock dropped 4% in Wednesday’s premarket trading despite Q3 metrics beating estimates, as the firm highlighted concerns about slowing growth in key metrics.

Why The Price Target Cut?

Although the quarter outperformed expectations, Piper Sandler flagged weakening momentum in key metrics. Growth in contract‑valued backlog (cRPO) slowed and subscription‑revenue expansion lost steam. 

On top of that, guidance for the fourth quarter appeared cautious, and the company projected a soft revenue outlook for the upcoming fiscal year, the firm said. 

On Stocktwits, retail sentiment around the stock remained in ‘extremely bullish’ territory, and message volume improved to ‘extremely high’ from ‘high’ levels in 24 hours. 

Valuation Perspective

Okta shares currently trade at around 4x projected 2026 revenue on an enterprise value basis. Piper Sandler views this valuation as balanced, offering moderate risk and reward potential until growth accelerates.

The leadership pointed to progress with new agentic security solutions and plans to expand the team of quota-carrying sales representatives. Piper Sandler said that initiatives reflect confidence that the company’s growth trajectory will strengthen as new products gain market traction.

Okta reported third quarter (Q3) revenue of $742 million and adjusted earnings per share (EPS) of $0.82. According to Fiscal AI data, revenue and EPS both exceeded the analysts’ consensus estimates of $730.44 million and $0.76, respectively. 

OKTA stock has gained over 3% year-to-date. 

Also See: GitLab’s Softening Growth And SMB Weakness Sparks Multiple Price Target Cuts

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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