Okta (OKTA), which was hit by a new breach of data announced last week, fell on Monday. Analysts considered the potential negative impact of Okta's stock and its sales pipeline.
Okta announced Friday that an unknown hacking group accessed files uploaded by "certain Okta users" to its support system. The company claimed that hackers gained access to the system by using stolen credentials. Okta stated that its services are fully operational.
Okta Stock - Slow response?
Andrew Nowinski, an analyst at Wells Fargo, said in a recent report that they were concerned about the impact this situation could have on the quarter.
We are concerned that Okta did not know about the breach, and they lacked the internal capability to detect it. The potential breach was reported by Beyond Trust, a customer. It took them two weeks before they made a public announcement.
Adam Tindle, a Raymond James analyst, said in a recent report: "We think it takes time to determine the specifics of security incidents. We also note that BeyondTrust has been a competitor and customer of Okta."
Tindle said, "While we wait for more details from Okta we believe that another security incident may cause customers to rethink their identity/access providers and reconsider renewals/expansions as Okta moves into adjacent areas."
Okta Stock: Earlier Breach
A hacking group named "Lapsus$", announced in March 2022 that it had gained access to Okta's systems. The group published screenshots from a computer that was used by a third-party Okta customer support engineer.
Peter Levine is an analyst at Evercore ISI. In a recent report, he stated that "In light the reported data breach last week, which marks 2nd major breaches in the past two years, and considering Okta’s connection to recent MGM attacks and Caesars attacks we are moving OKTA into tactical underperform". This decision was based on our concern that the events would most likely have an impact in the near future on Okta’s pipelines. This could force a downward adjustment to the 2024 estimates, and compromise consensus estimates for 2025.
Okta's stock price fell today by 8.5%, to 69.17. On Friday, the Okta share price fell 11.5%.
Okta, a San Francisco-based company, specializes in identity validation with software that manages and monitors privileged accounts. Hackers often target management or employees with administrative access to computer systems.