Identity and access management company Okta (NASDAQ:OKTA) was hit by a cyber attack, which led the management to strengthen its security environment and push forward the launch dates for the new products and features. Since the incident could hurt its finances and stock price, one should not be surprised, as a careful examination of the company’s risk disclosures indicates that Okta has previously acknowledged its vulnerability to growing cybersecurity risks. Additionally, TipRanks Risk Analysis tool hinted at it.
TipRanks’ Risk Analysis Tool shows that Okta and Innovation’s risk exposure (cyber security is part of Tech and Innovation Risk) is higher than the industry average. It accounts for 21.2% of its total risks, higher than the sector average of 20.3%.
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Okta allocates considerable resources to improve the security of its production environment. In recent weeks, the company has implemented various measures to strengthen its cyber security, including initiating a targeted security action plan and collaborating with third-party security firms. With this background, let’s take a look at what the Street is recommending for Okta stock.
What is the Future of Okta Stock?
Wall Street has a cautiously optimistic outlook on OKTA stock. However, following the release of Q3 results on November 29 and the revelation that the recent breach had a wider impact than initially anticipated, Piper Sandler analyst Rob Owens downgraded Okta from Buy to Hold. Additionally, he revised the price target down from $95 to $75.
Okta stock has 14 Buy, 12 Hold, and two Sell recommendations for a Moderate Buy consensus rating. Further, OKTA’s average analyst share price of $87.96 implies a 24.29% upside potential from current levels.
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Bottom Line
The recent Okta incident underscores the importance of thoroughly identifying and analyzing risk factors before making investment decisions. Diligent screening of risk profiles lowers the probability of future disappointments.
However, as the risk landscape for businesses continues to evolve, investors face challenges in keeping abreast of these changes. Additionally, the Securities and Exchange Commission’s (SEC) new regulations requiring public companies to report cyberattacks through regulatory filings within four business days of determining the material impact of the attack on operations will further complicate the assessment of scope and impact.
However, by using TipRanks’ dynamic Risk Analysis tool, investors can now assess the risks associated with a specific stock and stay informed of the evolving risk landscape. Regarding OKTA stock, the consensus rating of analysts suggests that potential investors should exercise caution before investing.
Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.