Okta (NASDAQ:OKTA) is scheduled to report its earnings on Tuesday, May 27, 2025. Historically, Okta’s stock has shown significant volatility around earnings releases. Over the past five years, the stock has posted a positive one-day return in 55% of instances following its earnings report. The median positive one-day return was 11.7%, with the maximum reaching 26.5%. This indicates substantial price swings during these periods.
For event-driven traders, understanding these historical patterns can be advantageous, though much depends on how the actual results compare to consensus expectations. There are two primary approaches to leverage this information:
- Pre-Earnings Positioning: Analyze the historical odds and take a position before the earnings release.
- Post-Earnings Positioning: Examine the correlation between immediate and medium-term returns after the earnings are released, and then adjust your position accordingly.
Analysts expect Okta to report earnings of $0.77 per share on sales of $680 million for the upcoming quarter. This compares to earnings of $0.65 per share on sales of $617 million in the same quarter last year.
From a fundamental perspective, Okta currently has a market capitalization of $21 billion. Over the last twelve months, the company generated $2.6 billion in revenue. However, it was operationally loss-making, with an operating loss of -$63 million, though it reported a net income of $28 million.
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See the earnings reaction history of all stocks
OKTA Stock Historical Odds of Positive Post-Earnings Return
Some observations on one-day (1D) post-earnings returns:
- There are 20 earnings data points recorded over the last five years, with 11 positive and 9 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 55% of the time.
- Notably, this percentage increases to 58% if we consider data for the last 3 years instead of 5.
- Median of the 11 positive returns = 12%, and median of the 9 negative returns = -8.1%
Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.
OKTA Stock Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
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