Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 3 Sept 2026
OKTA· Technology
Okta
Okta's high gross margins and financial health are offset by valuation concerns and inconsistent historical returns.
Buffett fit
Partial fit
Owner
30
Durability
62
Management
69
Price
10
Score updated 22 Oct 2026 · analysis from 3 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning 100% of Okta would involve focusing on sustaining its revenue growth, which is at a 5-year CAGR of 22.4%.
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In 10 years, Okta's durability will depend on maintaining its market position in identity solutions amid technological shifts.
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Okta's share count has increased with a 5-year CAGR of 4.4%, indicating potential dilution.
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The current valuation with a of 125.4 and an yield of 4.38% suggests the stock is priced for perfection.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 77.3% is top-quintile in the Technology sector.
- 2 growth of 23.97% year-over-year.
- 3Interest coverage ratio of 38.0 indicates strong ability to meet obligations.
- 4Net debt/EBITDA is effectively zero, showing no reliance on debt.
Concerns
5- 1 ratio of 125.4 indicates high valuation risk.
- 25-year average of -4.5% is below sector top-quintile.
- 3 of 5.1% is below the sector top-quintile cutoff of 18.0%.
- 4Share count CAGR of 4.4% suggests potential dilution.
Price history
$209-19.9%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Okta, Inc. provides identity solutions through its Okta Identity Cloud, serving enterprises and various organizations. The platform includes products like Single Sign-On and Adaptive Multi-Factor Authentication. With a of 77.3%, Okta demonstrates strong revenue generation through its subscription-based model. However, the of 5.1% suggests limited profitability at present.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 21, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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