Barclays has upgraded Okta to overweight from equal weight and increased its price target to $90 from $85 per share, saying that identity-focused security has moved to the forefront of enterprise spending. The move was explained in a note that emphasized both survey-driven shifts in spending priorities and a nascent opportunity linked to agentic security products.
Analyst Saket Kalia identified three primary reasons for the upgrade - improving survey information on spending, stronger intra-quarter checks, and what the bank described as an emerging agentic security tailwind. Barclays published its CIO survey alongside the note, and that survey placed identity as the top security spending priority for the second consecutive publication.
In the same survey analysis, Okta was listed sixth among top security vendors overall, a significant step up from its position near the bottom in 2022 and 2023 after a breach that had weighed on market sentiment. Barclays underscored that identity has become the largest sub-segment within security, with IDC data cited in the note estimating roughly a 19% compound annual growth rate off a $28 billion base.
Barclays said its intra-quarter checks have shown improvement, pointing to healthier underlying demand, increased channel engagement, and better execution following a sales force specialization initiative across Workforce and Auth0 that was implemented last year.
On the agentic front, the bank posed a strategic question: might protecting agents be principally an identity problem? Barclays noted that Okta has already captured early six-figure contracts for its agentic products even though those products are still limited in availability, and wrote that the firm expects Okta to benefit if that segment expands.
The $90 price target reflects a raised fiscal year 2028 free cash flow projection of $991 million. Barclays added that Okta's wide exposure across several high-growth identity sub-markets provides it with multiple, durable avenues for growth.
Key points
- Barclays upgraded Okta to overweight and raised the price target to $90 from $85.
- Identity was ranked the number one security spending priority in Barclays' CIO survey for a second straight report; identity is identified as the largest security sub-segment, growing about 19% CAGR off a $28 billion base per IDC.
- Improvements in intra-quarter checks and early traction in agentic products support Barclays' more positive stance; these developments affect enterprise cybersecurity procurement and vendor selection.
Risks and uncertainties
- Okta's reputation was previously affected by a breach in 2022-2023, which had weighed on sentiment among buyers and investors.
- Agentic products are currently of limited availability, which could constrain near-term revenue contribution from that line until broader rollout occurs.