Okta (NASDAQ:OKTA) and The Ultimate Software Group (NASDAQ:ULTI) Critical Comparison

Okta (NASDAQ:OKTA) and The Ultimate Software Group (NASDAQ:ULTI) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Risk and Volatility

Okta has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, The Ultimate Software Group has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500.

Valuation & Earnings

This table compares Okta and The Ultimate Software Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Okta $399.25 million 28.82 -$125.50 million ($1.03) -95.69
The Ultimate Software Group $1.14 billion 0.00 $65.14 million $2.39 N/A

The Ultimate Software Group has higher revenue and earnings than Okta. Okta is trading at a lower price-to-earnings ratio than The Ultimate Software Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Okta and The Ultimate Software Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Okta -31.90% -53.93% -14.44%
The Ultimate Software Group 4.78% 8.84% 3.38%

Institutional & Insider Ownership

69.3% of Okta shares are owned by institutional investors. Comparatively, 91.2% of The Ultimate Software Group shares are owned by institutional investors. 14.7% of Okta shares are owned by company insiders. Comparatively, 3.0% of The Ultimate Software Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Okta and The Ultimate Software Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Okta 0 7 12 0 2.63
The Ultimate Software Group 0 12 1 0 2.08

Okta currently has a consensus price target of $132.22, indicating a potential upside of 34.15%. The Ultimate Software Group has a consensus price target of $317.63, indicating a potential upside of ∞. Given The Ultimate Software Group’s higher probable upside, analysts plainly believe The Ultimate Software Group is more favorable than Okta.

Summary

The Ultimate Software Group beats Okta on 10 of the 13 factors compared between the two stocks.

Okta Company Profile

Okta, Inc. provides identity solutions for enterprises, small and medium-sized businesses, universities, non-profits, and government agencies in the United States and internationally. The company offers Okta Identity Cloud, a platform that offers a suite of products to manage and secure identities, such as Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization; Single Sign-On that enables users to access their applications in the cloud or on-premise from various devices with a single entry of their user credentials; Adaptive Multi-Factor Authentication, a product that provides an additional layer of security for cloud, mobile, and Web applications, as well as for data; Lifecycle Management, which enables IT organizations or developers to manage a user's identity throughout its lifecycle; and API Access Management that enables organizations to secure APIs.It also offers customer support and training, and professional services. Okta, Inc. sells its products directly to customers through sales force, as well as through channel partners. The company was formerly known as Saasure, Inc. Okta, Inc. was founded in 2009 and is headquartered in San Francisco, California.

The Ultimate Software Group Company Profile

The Ultimate Software Group, Inc. provides cloud-based human capital management solutions to enterprise companies, mid-market companies, and companies in the strategic market in the United States, Canada, Europe, the Asia Pacific, and internationally. Its UltiPro software solution delivers the functionality businesses need to manage the employee life cycle from recruitment to retirement. The company's UltiPro solution includes feature sets for talent acquisition and onboarding, human resources (HR) service delivery and management, benefits management and online enrollment, payroll, performance management, employee engagement surveying, compensation management with salary planning, budgeting, incentive award planning, succession management, learning management, reporting and analytical decision-making and predictive tools and time capture, scheduling, attendance tracking, and absence accruals; and has role-based features for HR professionals, executives, managers, administrators, and employees. Its UltiPro software solution is delivered through software-as-a-service. The company also provides professional services, and customer support and product maintenance services. It markets its products and services to manufacturing, food services, sports, technology, finance, insurance, retail, real estate, transportation, communications, healthcare, and other services industries primarily through direct sales force. The company was founded in 1990 and is headquartered in Weston, Florida.

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