Shares in Okta fell again on Monday in the wake of a new data breach announced last week. Analysts mulled the possible negative impact on Okta stock and the cybersecurity firm's sales pipeline.
Okta said Friday an unidentified hacking group had accessed files which "certain Okta customers" had uploaded to its support system. The company said the hackers were able to break into the system via stolen credentials. Okta said its services were fully operational.
Okta Stock: Slow Response?
"We now have concerns this could have a negative impact on the quarter and the pipeline," Wells Fargo analyst Andrew Nowinski said in a report.
"We are most concerned with the fact that Okta was unaware of the breach and did not have the internal capabilities to detect this behavior. They were notified of the potential breach by a customer (Beyond Trust) and still took approximately two weeks to make a public disclosure."
Raymond James analyst Adam Tindle said in a report: "We believe it can take time to figure out the details involved in security incidents, and note that BeyondTrust is a customer and competitor of Okta."
"As we await more details from Okta, we believe another security incident could cause customers to question their identity/access provider and rethink renewals/expansion as Okta looks to move into adjacencies," Tindle added.
Okta Stock: Earlier Breach
In March 2022, a hacking group called "Lapsus$" announced it gained access to Okta systems. The group posted online screenshots taken from a computer used by one of Okta's third-party customer support engineers.
"In light of last weeks reported data breach, which marks the 2nd major breach in two years and considering Okta's connection to the recent MGM and Caesars attacks, we are moving OKTA to tactical underperform," said Peter Levine, analyst at Evercore ISI in a report. "This decision is rooted in our concern that these events will most likely have a near-term impact on Okta's pipelines. (And) potentially force a downward revision to 2024 estimates and jeopardize consensus estimates for 2025."
On the stock market today, Okta stock fell 8.1% to close at 69.42. Further, Okta stock tumbled 11.5% on Friday.
San Francisco-based Okta specializes in identity verification with software that monitors and manages privileged accounts. Also, hackers often target employees or management with administrative access to company computer systems.
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