📝 usncan Note: Buy OKTA Stock Ahead Of Its Earnings?
Disclaimer: This content has been prepared based on currently trending topics to increase your awareness.
CANADA – 2025/08/16: In this photo illustration, the Okta logo is seen displayed on a smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Okta (NASDAQ:OKTA) is scheduled to announce its earnings on Tuesday, August 26, 2025. The identity and access management firm currently has a market capitalization of $16 billion. Over the past twelve months, its revenue was $2.7 billion, and it achieved operational profitability with $23 million in operating profits and a net income of $130 million. While much will depend on how the results compare to expectations and consensus, grasping historical trends could enhance your chances if you are a trader focused on events.
There are two methods to approach this: understand the historical odds and position yourself before the earnings release, or analyze the correlation between immediate and medium-term returns following earnings, adjusting your position accordingly after the results are released. That being said, if you are looking for upside with less volatility than individual stocks, the Trefis High Quality portfolio provides an alternative – it has outperformed the S&P 500 and yielded returns exceeding 91% since its launch.
Okta’s Historical Odds Of Positive Post-Earnings Return
Here are some insights on one-day (1D) post-earnings returns:
- Over the past five years, there have been 20 earnings data points, with 10 positive and 10 negative one-day (1D) returns observed. In conclusion, positive 1D returns occurred approximately 50% of the time.
- This percentage remains unchanged at 50% if we consider data from the last 3 years instead of the 5.
- The median of the 10 positive returns is 12%, while the median of the 10 negative returns is -8.9%.
Additional data for recorded 5-Day (5D) and 21-Day (21D) returns following earnings are displayed in the table below.
5-Day (5D) and 21-Day (21D) returns following earnings
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Correlation Between 1D, 5D, and 21D Historical Returns
A relatively lower-risk strategy (though ineffective if the correlation is weak) is to analyze the relationship between short-term and medium-term returns following earnings, identify a pair with the strongest correlation, and proceed with the appropriate trade. For instance, if 1D and 5D demonstrate the highest correlation, a trader can take a “long” position for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data derived from a 5-year and a 3-year (more recent) history. Note that the correlation 1D_5D indicates the correlation between 1D post-earnings returns and subsequent 5D returns.
Correlation Between 1D, 5D, and 21D Historical Returns
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Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000), providing impressive returns for investors. Additionally, if you prefer upside with a smoother experience than an individual stock like Okta, consider the High Quality portfolio, which has surpassed the S&P and achieved returns greater than 91% since its inception.
