The festive Tuesday party that was trading in Okta (OKTA -5.62%) stock resulted in a hangover the following day. After popping in price following the announcement of a new product, shares of the online identity security specialist took a nearly 6% battering on Wednesday. A new analyst note was a source of that ill feeling.
Before market open, KeyBanc prognosticator Michael Turits cut his price target on Okta stock to $66 per share from his previous estimation of $70. Despite the chop, he maintained his overweight (buy, in other words) recommendation.
Somewhat uncomfortably, Turits’ move came a day after the company announced a potentially quite lucrative new product. Okta for the US Military was formally rolled out by the company, and as the name implies, it’s the armed forces version of its identity protection suite of services. Investors were cheered by this, as the U.S. military has a massive budget and tends to be quite a reliable customer.
It wasn’t immediately clear why Turits modified his price target on the specialty tech company. Nevertheless, it’s not the first such action by an analyst in recent days. On Monday, prognosticators from both Canaccord Genuity and JMP Securities also did so. The former’s prognosticator T. Michael Walkley lowered his level to $70 from $85 per share, while the latter’s Trevor Walsh reduced his rather lofty one to $105 from $145.
This dynamic implies what many stock market wags call a “correction.” In other words, many investors might think their peers over-reacted to Okta’s good news regarding the military portal and “corrected” this by trading out of the stock the following day.
All in all, those interested in Okta stock shouldn’t concern themselves with day-to-day jumps like this. On a long-term basis stocks tend to move on fundamental performance and potential, and Okta is looking good on both counts.
Read More: Why Okta Stock Tumbled Today