Markets

Why Okta Stock Rose 10% in July

What happened

Shares of Okta (NASDAQ: OKTA) outperformed the market last month, rising 10% compared to a 5.5% rally in the S&P 500, according to data provided by S&P Global Market Intelligence.

The boost added to solid results for shareholders so far this year, with the digital identity management specialist's stock up nearly 100% through early August.

Rising blue and orange stock chart

Image source: Getty Images.

So what

Okta didn't issue any operating updates last month, but instead rose along with other tech stocks that investors believe will benefit from increased work-from-home time. The company provided hints of that pandemic-influenced shift in its first-quarter results, which showed a 48% spike in subscription software revenue.

"When this crisis is over," CEO Todd McKinnon predicted, "we don't expect organizations to revert to their prior ways of working."

Now what

McKinnon and his team issued an optimistic outlook for the fiscal second quarter that calls for sales to rise by over 30% to around $187 million. Key metrics supporting that expansion will include subscription sales and customer retention figures.

We'll find out the actual operating numbers when Okta announces Q2 results on Aug. 27. Management at that time will also update investors on its (likely bullish) outlook for the second half of 2020.

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Demitri Kalogeropoulos owns shares of Okta. The Motley Fool owns shares of and recommends Okta. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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