Okta Conjures Up a Great Quarter Amid a Tight Macro Environment; Maintaining $71 FVE

We are maintaining our $71 fair value estimate for no-moat Okta after the firm’s strong fiscal third-quarter financial results were offset by the macro tightness which we see affecting the firm’s financials for the upcoming quarters. As the firm navigates the tricky macro environment where most companies across our cybersecurity coverage have reported elongating sales cycles and softness in customer demand, we believe Okta is strongly positioned to benefit from the eventual rebound as the macroenvironment improves. While we don’t believe Okta’s business, with the value-destructive acquisition of Auth0, merits a narrow moat, we continue to view the firm as a leader in the identity and access management space. With shares up almost 15% after hours, we would recommend investors seek a larger margin of safety to invest in a Very-High-Uncertainty-rated name.