On Monday, cybersecurity play Okta hit a key performance benchmark, with its Relative Strength (RS) Rating climbing to 83, a rise from 80 the day before. The upgraded 83 RS Rating puts Okta stock in the top 17% of all stocks for price performance this past year. Okta stock was down 2.2% Monday.
Research shows that the best stocks often have an RS Rating over 80 in the early stages of their moves. Last quarter Okta surged from a 1-cent loss a year earlier to a 44-cent profit. In fact, it's been putting up dazzling sales and profit growth numbers for the past year.
Okta Stock Has Near-Best Composite Rating
The three quarters before last quarter Okta reported EPS gains of 267%, 181% and 410%. However, all of those gains came against small losses the prior year, making them easier comparisons. Perhaps more impressively, in the three stanzas leading up to Okta's latest quarter sales grew 33%, 25% and 23%. Last quarter sales rose a smaller but still respectable 21% to a record $584 million.
Look for the next report on or around Feb. 28.
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Okta provides a secure connection between individuals and companies. Its products include multifactor authentication, universal login, workforce identity cloud and other products.
Among its other major ratings Okta boasts a near-best 98 Composite Rating out of 99. IBD's Composite score combines five separate proprietary ratings into one. The best growth stocks have a Composite Rating of 90 or better.
It has an 81 Earnings Per Share Rating and an A- Accumulation/Distribution Rating on an A+ to E scale. The A- A/D Rating shows that big money managers such as mutual funds and pension funds are eager buyers. Offsetting that is that 1,225 funds hold shares of Okta, down from 1,261 funds in September and 1,280 last June.
One yellow flag is Okta's C SMR Rating (sales + profit margins + return on equity) on an A-to-E scale, mainly reflecting its weak results in years past.
Shares Nearly Doubled; Nearing Buy Point
Okta stock nearly doubled from a 44.12 intraday low at the start of November 2022 to an 85.93 close Monday. It's building a flat base with a 92.38 buy point. See if it can clear the breakout price in volume at least 40% higher than normal.
Okta stock holds the No. 6 rank among its peers in the 34-stock Computer Software-Security industry group. CyberArk Software and Palo Alto Networks are also among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
The unique IBD Relative Strength Rating identifies market leadership by using a 1 (worst) to 99 (best) score that identifies how a stock's price performance over the last 52 weeks matches up against the rest of the market.
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