Okta (NASDAQ:OKTA) & Nutanix (NASDAQ:NTNX) Critical Analysis

Okta (NASDAQ:OKTA) and Nutanix (NASDAQ:NTNX) are both large-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, valuation, risk and earnings.

Insider & Institutional Ownership

86.6% of Okta shares are held by institutional investors. Comparatively, 85.3% of Nutanix shares are held by institutional investors. 7.0% of Okta shares are held by company insiders. Comparatively, 6.8% of Nutanix shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Okta has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500. Comparatively, Nutanix has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Earnings and Valuation

This table compares Okta and Nutanix”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Okta	$2.26 billion	7.38	-$355.00 million	($0.35)	-278.49
Nutanix	$2.23 billion	8.52	-$124.78 million	($0.35)	-202.43

Nutanix has lower revenue, but higher earnings than Okta. Okta is trading at a lower price-to-earnings ratio than Nutanix, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Okta and Nutanix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Okta	-1.54%	0.47%	0.32%
Nutanix	-3.54%	-12.28%	3.30%

Analyst Ratings

This is a breakdown of current ratings and target prices for Okta and Nutanix, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Okta	1	15	16	0	2.47
Nutanix	0	3	12	0	2.80

Okta currently has a consensus target price of $104.55, suggesting a potential upside of 7.26%. Nutanix has a consensus target price of $79.50, suggesting a potential upside of 12.21%. Given Nutanix’s stronger consensus rating and higher probable upside, analysts plainly believe Nutanix is more favorable than Okta.

Summary

Nutanix beats Okta on 7 of the 13 factors compared between the two stocks.

About Okta

Okta, Inc. operates as an identity partner in the United States and internationally. The company offers Okta's suite of products and services used to manage and secure identities, such as Single Sign-On that enables users to access applications in the cloud or on-premises from various devices; Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, web applications, and data; API Access Management enables organizations to secure APIs; Access Gateway enables organizations to extend Workforce Identity Cloud; and Okta Device Access enables end users to securely log in to devices with Okta credentials. It also provides Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization; Lifecycle Management enables IT organizations or developers to manage a user's identity throughout its lifecycle; Okta Identity Governance provides identity access management and identity governance solutions; Advanced Server Access offers access management to secure cloud infrastructure; Okta Privileged Access enables organizations to reduce risk with unified access and governance management for on-premises and cloud resources; and Okta Workforce Identity Workflows. In addition, the company offers Universal Login, which allows customers to provide login experience across different applications and devices; and Attack Protection, a suite of security capabilities that protects customers from different types of malicious traffic. Further, it provides Adaptive Multi-Factor Authentication, Passwordless, Machine to Machine, Private Cloud, Organizations, Actions and Extensibility, and Enterprise Connections. The company sells its products directly to customers through sales force and channel partners. The company was formerly known as Saasure, Inc. Okta, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.

About Nutanix

Nutanix, Inc. engages in the provision of a cloud platform leveraging web-scale engineering and consumer-grade design. It operates through the following geographic segments: United States, Europe, the Middle East, Africa, Asia Pacific, and Other Americas. The firm also provides software solutions and cloud services to customers’ enterprise infrastructure. The company was founded by Dheeraj Pandey, Ajeet Singh, and Mohit Aron in 2009 and is headquartered in San Jose, CA.