Blue Grotto Capital Expands Stake in Okta by 80.6% in Q2

Blue Grotto Capital LLC significantly increased its investment in Okta, Inc. (NASDAQ:OKTA) during the second quarter of 2023. The firm raised its holdings by 80.6%, acquiring an additional 112,801 shares. Following this acquisition, Blue Grotto Capital now holds 252,801 shares, representing approximately 3.1% of its total investment portfolio. This makes Okta the firm’s 13th largest holding, valued at roughly $25.3 million at the end of the reporting period.

The disclosure, submitted to the Securities and Exchange Commission, highlights a broader trend among institutional investors regarding their stakes in Okta. Other notable firms have also adjusted their positions. For instance, Adage Capital Partners GP L.L.C. increased its holdings by an impressive 300% during the same period, acquiring 100,000 shares valued at nearly $10 million.

Ameriprise Financial Inc. modestly raised its stake by 1.1%, now owning 2,037,640 shares worth approximately $203.7 million. AQR Capital Management LLC also expanded its position, growing its holdings by 13.9% to 1,175,676 shares, valued at about $117.1 million. Additionally, Alamea Verwaltungs GmbH boosted its investment by 34.9%, while California State Teachers Retirement System increased its stake by 0.5%.

Currently, institutional investors own 86.64% of Okta’s stock, indicating strong confidence in the company’s future prospects.

Analysts Adjust Price Targets for Okta

Analysts have been actively reassessing Okta’s stock, leading to a range of new price targets. On December 3, 2023, Stifel Nicolaus downgraded its price objective from $130.00 to $121.00, maintaining a “buy” rating. In contrast, DA Davidson reaffirmed a “buy” rating with a target of $140.00. BTIG Research also revised its target down from $142.00 to $116.00, while Needham & Company LLC restated a “buy” rating with a target of $110.00. Citigroup lowered its price target from $110.00 to $100.00, assigning a “neutral” rating.

Overall, 23 analysts have rated Okta as a “buy,” while 14 have given it a “hold” rating, and 2 have rated it as a “sell.” According to MarketBeat.com, Okta has an average target price of $112.91 and a consensus rating of “Moderate Buy.”

Current Market Performance and Insider Transactions

As of the close of trading on Friday, Okta shares opened at $90.18. The stock has experienced fluctuations, with a 52-week low of $75.05 and a high of $127.57. The company has a market capitalization of $15.79 billion, a price-to-earnings (P/E) ratio of 82.73, and a price-to-earnings-growth (PEG) ratio of 4.27.

In its most recent earnings report, Okta disclosed earnings per share (EPS) of $0.82 for the quarter, surpassing the consensus estimate of $0.76. The company reported revenue of $742 million, exceeding expectations of $730.23 million. This marked an 11.6% increase in revenue year-over-year, compared to $0.67 EPS in the same quarter last year. For FY 2026, Okta has guided for EPS in the range of $3.430 to $3.440.

Recent insider trading activity has also been notable. Chief Revenue Officer Jonathan James Addison sold 6,091 shares on September 18, 2023, at an average price of $92.61, resulting in a total transaction value of approximately $564,087.51. Following this sale, he retains 7,067 shares valued at about $654,474.87, reflecting a 46.29% reduction in his position.

Furthermore, insider Larissa Schwartz sold 1,318 shares on December 5, 2023, at an average price of $85.71, bringing her total transaction to approximately $112,965.78. Insiders have sold a total of 66,293 shares valued at around $6.12 million in the last 90 days, with insiders currently holding 5.68% of the stock.

Okta, Inc. operates as a leader in identity management, providing a range of products and services designed to secure and manage user identities across various platforms. The company’s offerings include Single Sign-On and Adaptive Multi-Factor Authentication, which are essential for organizations seeking to enhance security in a digital landscape.