Wells Fargo Upgrades Okta Stock as Growth Story Shows Signs of Turning a Corner

Wells Fargo recently upgraded Okta (OKTA) stock to an “Overweight” rating with a price target of $180 per share. This upgrade is important because Okta has faced concerns about slowing growth in recent years. Wells Fargo now believes those concerns may be easing as demand for identity and access management products picks up and Okta continues to make progress on its strategy.

Wells Fargo analyst Richard Poland believes that Okta’s strategy is starting to pay off. The analyst pointed to the company's focus on large enterprise customers, its growing partner network, stronger sales of identity governance products, and renewed focus on Auth0 as key areas showing progress. Let's take a closer look.

Okta Shows Positive Signs

Okta reported second-quarter fiscal 2027 results on Aug. 26, showing revenue of $805 million, up 11% year-over-year (YOY). Adjusted EPS came in at $1.05, beating the consensus estimate of $0.97 per share. The company also generated about $227 million in free cash flow during the quarter.

But investors should also look beyond the headline numbers. One key number to consider is remaining performance obligations (RPO), which can give investors a better sense of future revenue already tied to customer contracts. In Q2, RPO was about $4.86 billion, up 17% YOY.

Okta’s updated outlook for the rest of fiscal 2027 is also important. That's because a strong quarter, combined with steady or higher guidance, can give investors more confidence that growth is picking up as well as support the bullish view behind the Wells Fargo upgrade. For fiscal 2027, Okta now expects revenue to grow between 10% and 11%, suggesting the company believes it can continue growing at a steady pace.

AI Could Create a New Growth Opportunity

AI could become a new growth engine for Okta as businesses figure out how to secure a world where software is no longer the only thing accessing their systems. AI agents can now communicate with apps, databases, and more, creating more security risks for companies.

Okta sees an opportunity to use its identity-management technology to help businesses control and protect against this new issue. In fact, the company is already working on products that can help make AI-driven systems more secure.

Helping to fuel even more upside is the Wells Fargo upgrade. Plus, as more companies move their apps and data online, the need for identity security should remain strong, especially with the rise of AI only creating more potential issues.

Moving forward, the key question is whether this AI opportunity will actually help Okta grow revenue faster. If demand improves, and AI security becomes even bigger than it is now, Okta could move well beyond any concerns about slowing growth.

For now, the Wells Fargo upgrade suggests that Wall Street is becoming more optimistic about Okta’s growth picking up again.

What Do Analysts Say About OKTA Stock?

Overall, Okta has a consensus “Strong Buy” rating on Wall Street. Of the 43 analysts covering OKTA stock, 31 have a “Strong Buy” rating, two have a “Moderate Buy” rating, eight analysts have a “Hold” rating, one has a “Moderate Sell” rating, and one analyst has a “Strong Sell” rating.

The mean target price of $146.38 has already been surpassed by current levels. Meanwhile, the high price target of $180 implies potential upside of 4% from here.