Is Okta (OKTA) Still Below Fair Value Following Its Permiso Acquisition?
Okta acquisition of Permiso puts identity security in focus
Okta (OKTA) has agreed to acquire Permiso Security in a roughly US$200 million mostly cash deal, bringing identity threat detection and response tools into its existing identity management platform.
This move positions Okta more directly inside Security Operations Center workflows, with planned capabilities that span human, machine, and AI agent identities across multi-cloud environments.
See our latest analysis for Okta.
Okta shares trade at US$141.93 and recent news, including the Permiso deal and an upcoming Q2 FY 2027 earnings release, comes after strong momentum, with a 90 day share price return of 83.75% and a 3 year total shareholder return of 95.60% despite a weaker 5 year total shareholder return of 40.89%.
If Okta’s move into identity security has your attention, this is a useful moment to see what other AI focused stocks are doing through the 33 AI small caps
Okta now trades above the average analyst target and sits close to the internal fair value estimate range. After the Permiso jump, is the current price widening that valuation gap or simply catching up?
Most Popular Narrative: 6% Undervalued
Okta’s most followed valuation narrative pegs fair value at $151 per share, which sits above the recent $141.93 close and frames the current debate around upside versus execution.
Okta has a solid foundation: a technically brilliant solution, a strong market position and a recurring revenue model. But to be truly successful, Todd McKinnon needs to take strategic risks and further develop the business model.
It is not enough to have a better solution than the competition. The key is to find a business model that solves a “problem” for customers so elegantly that they are willing to pay for it, and profitably.
Want to understand why this narrative still sees upside for Okta even after a strong share price run? The key lies in a specific revenue growth path, a profitability target and a future earnings multiple that together build a tightly argued fair value story without leaving much slack in the assumptions.
Result: Fair Value of $151 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this Okta narrative could be challenged if profitability momentum stalls or if new AI agent identity products fail to gain meaningful customer adoption.
Find out about the key risks to this Okta narrative.
Another View: Okta looks expensive on earnings multiples
While the narrative driven fair value for Okta lands at $151 per share, the preferred earnings multiple tells a tougher story. The stock trades on a P/E of 99.9x compared with a fair ratio of 38.3x, the US IT industry at 17.4x and peers at 34.7x. That gap points to meaningful valuation risk if sentiment cools.
For a closer look at how this pricing stacks up against the earnings profile and peers, take a moment to review the See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With sentiment split between opportunity and concern around Okta, take a moment to review the underlying data and form your own stance with the 2 key rewards and 2 important warning signs.
Looking for more Okta style investment ideas?
If Okta has you thinking about what else might be on your radar, now is the time to scan wider. Fresh ideas often appear before most investors notice.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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