By Senad Karaahmetovic
Shares of Okta (NASDAQ:OKTA) are up about 6% on Thursday after the company announced plans to cut 300 full-time jobs, which account for about 5% of its global workforce.
Okta projects it will incur $15 million in restructuring charges in its fourth fiscal quarter. The company’s management informed employees about the restructuring changes in an e-mail today.
Prior to the announcement, Needham & Company analysts raised their recommendation on Okta stock to Buy from Hold with a price target of $90 per share.
“We believe Okta set conservative guidance for FY24, calling for just 16%-17% Revenue growth. The conservatism was driven by disruption to both sides of Okta over the Summer resulting from poor Auth0 acquisition integration and disruptions to the Enterprise Sales process. It appears to us that Okta has righted these problems. We think the growth bar set at 16%-17% in FY24/ CY23 is easily beatable as it was set before evidence of the fixes kicked in,” they wrote in a client note.
The analysts also weighed in positively on the Consumer and Workforce business units.