Okta (OKTA:NAS) Fundamental Valuation Report

Fundamental Valuation Report


Technology:Software – Infrastructure

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$216.20 (USD) 09/25/2020

Weighted Valuation
$210.83 (USD)

Overall Rating
Fairly valued to slightly Overvalued by 2.5%

Valuation Models Adjusted Book Value: $190.15 (USD)
Multiples: $195.43 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation
According to Analyst consensus at $229.75 this stock is Undervalued

Company Overview (OKTA:NAS USD)

Price 216.20
Range 208.00 – 218.15
52 week 96.08 – 230.60
Open 208.23
Vol / Avg. 1.67M/1.76M
Mkt cap 27.69B
P/E 0.00
Div/yield 0.00/0.00
EPS -1.78
Shares 128.09M
Beta 0.00

Company Description

Okta, Inc. addresses two primary security concerns via its workforce identity and customer identity solutions. The pureplay cybersecurity firm sells products to protect employees, contractors, and partners as well as its customers’ end users. Okta’s software solutions are cloud-delivered, and its integration network gives customers security protection across a wide variety of applications that are critical to business and government needs. The California-based company went public in 2017 and had over 2,100 employees at the end of the third quarter of fiscal 2020.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for OKTA:NAS

Using a discounted cash flow model we generated an intrinsic value of $10.95 (USD) for OKTA:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

OKTA:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $10.95 1% 5% 1% 5%
WACC (or Ke) 8.69 $13.36 $9.26
Terminal Growth Rate 3.00 $9.44 $13.10
Tax Rate 0.01 $11.40 $10.51
Cash Flow 80,349,153 $10.47 $11.43
Capital Expenditures -10,281,800 $10.90 $11.00
Long Term Debt 0 $10.95 $10.95

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $24.47 (USD) for OKTA:NAS. We also generated a valuation of $65.48 (USD) using other metrics and comparables.
The comparable companies were Euronet Worldwide (EEFT:NAS), F5 Networks (FFIV:NAS), Akamai Technologies (AKAM:NAS), VeriSign (VRSN:NAS) and NortonLifeLock (NLOK:NAS).

Company OKTA:NAS End Date Value
Earnings/Share ($1.89) (USD)
Book Value/Share $5.35 (USD)
Sales/Share $5.74 (USD)
Cash Flow/Share $0.69 (USD)
EBITDA/Share ($1.35) (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 0.0
$21.10 (USD) 0.0
$41.02 (USD) 0.0
$2.28 (USD) 0.0
$0.00 (USD) 0.0
0.00 PE Ratio 28.97 38.77 22.51 33.78 30.46 19.35
40.42 PB Ratio 3.94 3.78 3.41 4.65 0.00 0.00
37.69 PS Ratio 7.15 1.84 3.15 6.02 19.33 5.42
311.62 PCF Ratio 16.26 7.61 10.60 16.62 30.21 0.00
0.00 EV to EBITDA 16.76 13.60 13.86 17.55 26.97 11.82


Using a multiples approach we generated a valuation of  $195.43 (USD) for OKTA:NAS

Company OKTA:NAS End Date Value
Earnings/Share ($1.89) (USD)
Book Value/Share $5.35 (USD)
Sales/Share $5.74 (USD)
Cash Flow/Share $0.69 (USD)
EBITDA/Share ($1.35) (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$182.06 (USD) 0
$127.29 (USD) 0
$276.96 (USD) 0
$0.00 (USD) 0
Ratios Ratio Average
PE Ratio 0.00
PB Ratio 34.03
PS Ratio 22.19
PCF Ratio 399.19
EV to EBITDA 0.00

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  OKTA:NAS for the last 3 years was  34.03

We ran the Adjusted Book Value for  OKTA:NAS and generated a book value of  $5.59 (USD)
By multiplying these we get an adjusted valuation of  $190.15 (USD)

Analyst Data

In the Stockcalc database there are 4 analysts that provide a valuation for OKTA:NAS. The 4 analysts have a concensus valuation for OKTA:NAS for 2021 of $229.75 (USD).


Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
3 1 0 4.0000 Outperform 2020-9-24

Current Price: 216.2 USD

Analyst Consensus
USD Millions 2021 2022 2023
Mean EPS -0.19 0.14 0.37
# EPS Analysts 4 4 3
Mean Revenue 803.80 1,039.90 1,278.10
# Revenue Analysts 4 4 3
Mean Target Price 229.75
Mean Cash Flow 0.61 1.02 1.19
Mean EBITDA -183.00 -120.00
Mean Net Income -1.90 19.60 55.40
Mean Debt Outstanding -793.20 -876.80 -1,053.50
Mean Tax Rate 11.90 1.00 10.90
Mean Growth Rate 25.00
Mean Capital Expenditure 21.20 33.00 36.10

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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