TD Cowen has adjusted its valuation on Okta, Inc. (NASDAQ:OKTA), lowering the firm's price target to $105 from $115 while retaining a Hold recommendation. Okta shares were changing hands at $69.51, trading close to their 52-week low of $68.77 after a 15.7% decline over the prior week.
The primary reason for the reduced price target, according to TD Cowen, is an observed contraction in the market. Despite that caution, the firm is forecasting Okta to report fiscal fourth-quarter 2026 results in line with expectations.
In its assessment, TD Cowen points to continued security demand evident from a recent spending survey, alongside gains in sales productivity and enhancements to the companys value proposition - specifically addressing developer-focused functionality and protections related to artificial intelligence. The firm also underscores Okta's gross profit margin, which it notes remains elevated at 77%.
InvestingPro analysis referenced by the firm suggests that the stock is undervalued relative to its Fair Value and includes Okta on a Most Undervalued list. TD Cowen indicates that investors seeking deeper detail can consult a Pro Research Report for expanded coverage of valuation and growth dynamics.
TD Cowen additionally characterizes the identity market as an arena of intense competitive rivalry, reiterating the Hold position on Okta shares in that context.
Okta itself has taken action on capital allocation, announcing a $1 billion share repurchase program that represents roughly 6.5% of its current market capitalization. The program permits repurchases through various mechanisms depending on market conditions and corporate requirements.
The company also reported solid fiscal third-quarter 2026 results, with revenue rising 12% year-over-year and current remaining performance obligations increasing 13%. These operational metrics have been met with positive responses from several sell-side analysts.
In recent analyst moves, Stephens upgraded Okta's rating from Equal Weight to Overweight, citing growth in identity security driven by trends like AI and cloud adoption. DA Davidson maintained a Buy rating and a $140.00 price target. Cantor Fitzgerald reiterated an Overweight rating with a $115.00 price target and described Okta as a "contrarian value play." Collectively, these calls reflect differing views on Okta's strategic direction and market positioning.
While TD Cowen has moderated its near-term valuation due to market contraction, other firms emphasize growth drivers and the company's buyback as evidence of management confidence. The mix of cautious valuation adjustment, steady operational performance, and active capital return measures frames a complex analyst landscape for Okta as it navigates a competitive identity market.