Okta Q1 earnings preview: All eyes on outlook amid continued unprofitability
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Okta (NASDAQ:OKTA) is scheduled to announce Q1 results on Thursday, Jun. 2, after market close.
Consensus EPS estimate is -$0.34 (-240% Y/Y) and consensus revenue estimate is $388.77M (+54.9% Y/Y).
Over the last 2 years, OKTA has beaten EPS and revenue estimates 100% of the time.
Over the last 3 months, EPS estimates have seen 1 upward revision and 24 downward. Revenue estimates have seen 21 upward revisions and 1 downward.
Palo Alto Networks (PANW) issued strong guidance in its Q3 earnings report last month, which analysts said boded well for the entire sector. While OKTA remains unprofitable, it will likely benefit from increased cyber security enterprise spending. 
Hedgeye named OKTA as a new best idea short as metrics of core OKTA adoption are slowing. Wells Fargo cut its price target on OKTA, citing lower profitability and growth. 
OKTA in Apr. said the impact from its Jan. data breach was "significantly smaller" than expected and the threat "actively controlled" a single workstation.
Morgan Stanley cut its PT on OKTA, but kept its Overweight rating as the fallout from the data breach may not materially impact revenue. OKTA will likely see 30% organic growth in current remaining performance obligations in Q1 and Q2.
After OKTA in Mar. confirmed reports of the security breach, Raymond James downgraded OKTA to Market Perform. Truist cut OKTA's rating to Hold, saying there was a "lack of visibility on the extent of damage to customers". 
SA contributor JR Research in a bearish analysis said investors should sell OKTA as unprofitability will continue to weigh on the overvalued stock. 
OKTA slid after issuing weak guidance in its Q4 earnings report. It projected Q1 adj. loss per share of $0.35-$0.34 and revenue of $388M-$390M. 
OKTA stock, which declined 63% YTD, underperformed the Nasdaq-100 technology sector index in the last 1 year.