Okta (OKTA) shares climbed in pre-market trading Monday after Wells Fargo upgraded the identity management software maker to Overweight from Equal Weight, pointing to improving enterprise demand, channel momentum, and a growing artificial intelligence opportunity that the market has yet to fully price in.
Analyst Richard Poland lifted the firm’s 12-month price target to $180 from $150, implying roughly 22% upside from Friday’s close. The San Francisco-based company, valued at about $26 billion, has already surged 78% over the past three months, yet Poland argued the rally still has room to run.
“Okta’s execution focus on large enterprise (capacity/partner expansion), IGA cross-sell & Auth0 (restored specialist coverage) [are] bearing fruit,” Poland wrote in a note to clients Monday. “Our approach has been see-to-believe and we’re starting to see it.”
He added that Okta is “not fully appreciated by the current share price.”
Wells Fargo’s field work shows businesses are directing more resources toward identity-related services, with respondents ranking identity as the second-highest investment priority. Okta also topped the list of vendors gaining share in the identity market, ahead of Microsoft (MSFT).
Channel checks reinforced the bullish case. Sales through Okta’s partners came in 47% above plan, while potential future business ran 12% above plan, according to the note.
Beyond the core business, Wells Fargo sees AI as a meaningful catalyst. As companies deploy more AI tools and autonomous agents, the need to manage and secure machine identities expands, positioning Okta to capture incremental demand.
“We believe improving end-market demand & execution could generate a durable low-teens potential growth profile, limiting downside, while AI identity could provide meaningful upside to out-year estimates,” Poland wrote.
The firm added that the likelihood of AI-driven upside “continues to rise.”
Okta is scheduled to report second-quarter fiscal 2027 results after the market closes on August 26. Wall Street expects revenue of approximately $793 million and adjusted earnings per share of roughly $0.96, which would represent about 9% revenue growth from the prior-year period. Investors will also focus on remaining performance obligations and management’s guidance for the rest of fiscal 2027.
In the first quarter, Okta posted revenue of $765 million, up 11% year over year, with adjusted EPS of $0.91, beating the $0.85 consensus estimate. The company guided to 9% to 10% revenue growth for fiscal 2027.
Wells Fargo’s call aligns with broader Wall Street sentiment. LSEG data shows 36 of 46 analysts rate Okta a Buy or Strong Buy. TipRanks separately tracks a Strong Buy consensus based on 29 Buy ratings, four Holds, and one Sell.
However, the average price target across TipRanks-tracked analysts sits at $135.76, which would imply downside of nearly 8% from current levels, reflecting a wide dispersion in expectations as the stock’s rapid ascent has outpaced many analysts’ targets.