Massive Update for Okta Stock Investors

Parkev Tatevosian, CFA•Aug 13, 2026

Summary

Parkev provides an analysis of Okta's performance in 2026, noting that the stock has rallied over 71% since mid-April after a rocky start to the year where it dipped to $65 per share. While Parkev acknowledges Okta's impressive revenue growth—increasing nearly tenfold to $3 billion since 2018—Parkev expresses concern regarding the company's efficiency in generating profits from its investments. Specifically, Okta's return on invested capital (ROIC) stands at 3.31%, which is significantly lower than its weighted average cost of capital (WACC) of 9.03%.

Parkev highlights that a forward price-to-earnings (P/E) ratio of 34.6 makes the stock one of the most expensive it has been since late 2023. Although the cybersecurity industry is generally profitable and Okta's operating margins have improved to 5.7%, Parkev believes the stock's price appreciation has outpaced its fundamental improvements. Consequently, Parkev is moving Okta to a hold rating, matching previous decisions made for other major cybersecurity players.

Okta (OKTA): Parkev notes the stock's 71% rally and strong 10x revenue growth but points out that the ROIC of 3.31% is well below the 9.03% WACC. Parkev considers the forward P/E of 34.6 to be near historical highs, leading to a downgrade from buy to hold as of August 7, 2026.

Palo Alto Networks (PANW): Parkev mentions this company as a larger industry peer that has also seen its stock price soar by over 100% in 2026. Parkev previously recommended the stock as a buy but indicates it was downgraded to a hold prior to the current Okta update.

Fortinet (FTNT): Parkev identifies Fortinet as a major revenue leader in the cybersecurity space alongside Palo Alto Networks. Parkev had previously ranked the stock as a buy, resulting in gains of over 100%, but has since moved it to a hold rating as well.

Mentioned Stocks

FTNT

Sentiment: HOLD

Reasoning: Parkev had previously ranked Fortinet as a buy, leading to gains of over 100% in 2026. However, Parkev indicates that the stock has been downgraded to a hold following the substantial price increase, similar to the action taken on Okta.

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PANW

Sentiment: HOLD

Reasoning: Parkev previously recommended Palo Alto Networks as a buy, and the stock has since increased by over 100%. Parkev mentions downgrading it to a hold recently because, like Okta, the price appreciation reached a level where Parkev no longer views it as a buy opportunity.

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OKTA

Sentiment: HOLD

Reasoning: Parkev is downgrading the stock from a buy to a hold because the share price has increased by 71% while the valuation has reached a high forward P/E of 34.6. Parkev notes that the current ROIC of 3.31% is significantly lower than the WACC of 9.03%, meaning the company is not yet generating enough profit to justify the cost of capital. Parkev mentioned the stock fell to $65 earlier in the year before this massive rally.

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