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Okta’s DCF Stock Analysis

Here’s my assumptions:

Risk Free Rate (10 Years Interest Rate Swap): 4.131%

Risk Premium (Taken from the Aswath Damodaran equity premium spreadsheet): 4.33%

Interest Rate Spread on The Risk free rate ( For the cost of debt calculation): 1%

Last 24 Months Beta: 1.33

Historical Data

Revenue growth in the last 10 years (CAGR): 40.69%

Earnings growth in the last 10 years (CAGR): / (From -76,3 million to +130 million)

Unlevered Free Cash Flow growth in the last 9 years (CAGR): 81.01% (2017 results had the first positive Unlevered Free Cash Flow)

Future Assumptions

End of Year FCF growth: 25%

Growth until end of 2026: 50%

Growth until end of 2034: 10%

Perpetual growth: 3.1%

Net Debt: -1.778B

Outstanding Stock Options Present Value Assumption: $0.092B

Restricted Stock Units Present Value Assumption: $0.779B

Stock Valuation based on these assumptions: $268

Last update 06/11/2025

All the content in this newsletter should be taken as informational content only. THIS IS NOT FINANCIAL ADVICE! Do your own Due Diligence before investing or contact a professional financial advisor.

I don’t have a position in Okta (OKTA) and I don’t plan to add a position in the coming days.