Okta Emphasizes AI-Driven Security: Can PANW Advance Its Lead?

Okta OKTA is stepping up its efforts in identity protection by putting artificial intelligence (AI) at the center of its security strategy. The company's Identity Threat Protection with Okta AI advanced features enables customers to detect and respond to identity-based threats in real time and prevent damage before it occurs.

This AI approach supports Okta's growing portfolio, which includes Identity Governance, Privileged Access, Fine-Grained Authorization, Device Access and Identity Security Posture Management. The company is also expanding its security tools to protect non-human identities like service accounts and bots, which is a growing concern in today's cloud and AI environments. This all fits into a larger zero-trust model, where no user or device is trusted by default.

A major boost to this AI-driven vision comes from Okta’s new partnership with Palo Alto Networks PANW. This integration creates a unified security architecture that allows organizations to automate threat detection and response, secure application access across any device and streamline identity workflows without compromising security. Through this collaboration, Okta’s threat detection is now integrated into Palo Alto’s powerful security platforms — Cortex XSIAM and XDR — creating a comprehensive response to the most advanced attacks.

With nearly 2,000 shared customers, Okta and Palo Alto Networks are joining forces to make security tools work better together. Their partnership helps businesses automate protection, simplify operations and adopt AI faster.

Okta Faces Rising Pressure in IAM Space

Okta is facing significant competition from CyberArk Software CYBR and Microsoft MSFT in the identity and access management (IAM) domain.

CyberArk leads the Privileged Access Management space, strengthened by its Zilla Security and Venafi acquisitions, expanding into Identity Governance and machine identity protection. In the first quarter of 2025, the company posted 43% revenue growth and improved margins, driven by the company’s robust dominance in identity security. CyberArk’s continuous investments in its product suite and go-to-market are noteworthy.

Microsoft’s Entra ID poses a significant challenge with its fully integrated Identity and Access Management platform. Serving over 900 million monthly active users, the company offers advanced tools like Single Sign-On, Multi-Factor Authentication, Conditional Access and Identity Protection. Microsoft delivers these capabilities at scalable levels, from free to P2, supported by centralized control and global reach, reinforcing its dominance in secure identity solutions.

OKTA’s Price Performance, Valuation & Estimates

Shares of Okta have appreciated 18.8% year to date compared with the Zacks Security industry’s return of 15.6%.

OKTA's YTD Price Return Performance

From a valuation perspective, Okta, trading at a forward Price/Cash Flow ratio of 21.44, is slightly lower than the broader Zacks Computer and Technology sector’s 21.7X. OKTA has a Value Score of D.

OKTA Forward 12-Month Price/CF Ratio

The Zacks Consensus Estimate for OKTA’s second-quarter fiscal 2026 earnings is pegged at 84 cents per share, unchanged over the past 30 days, indicating 16.67% year-over-year growth.

The consensus mark for fiscal 2026 earnings is pegged at $3.28 per share, unchanged over the past 30 days. The earnings figure suggests 16.73% growth over the figure reported in fiscal 2025.

OKTA stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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