03:04 PM EST, 02/20/2025 (MT Newswires) -- Okta's ( OKTA ) Q4 setup looks mixed, with easier year-over-year comparisons and a shifting competitive landscape amid significant strategic changes, including a recent workforce reduction aimed at improving margins, UBS Securities said in an earnings preview.

The firm said in a note on Wednesday that Okta's ( OKTA ) guidance for contracted remaining performance obligation suggests sequential contract additions at the high end of $73 million, which is notably lower than the sequential adds of $126 million, $105 million, and $170 million seen in the prior three quarters.

However, UBS believes the guidance still reflects some conservatism, given the company's recent pattern of contracted remaining performance obligation beats.

Okta ( OKTA ) is revamping its go-to-market approach, shifting back to specialist-led sales and refining its platform definitions to support an enterprise persona-oriented sales motion. UBS said these adjustments should help address past inefficiencies, such as crowded sales territories and the limitations of a single-seller model.

Additionally, new bookings from recently launched products suggest healthy upsell momentum, and UBS views any further clarity on upsell performance as a positive catalyst for growth.

UBS increased its price target on Okta's ( OKTA ) stock to $120 from $108 and reiterated its buy rating.

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