Why Okta Stock Crushed the Market on Tuesday

What happened

Okta (OKTA 3.91%) stock rocked the market on Tuesday. The online identity protection specialist saw its shares rise by nearly 4% on the day, trouncing the S&P 500 index’s less than 1% advance, thanks to the introduction of a new product.

So what

Tuesday morning, Okta announced its latest online suite. This is the self-descriptive Okta for the US Military, which has been designed and built exclusively for the federal government’s Department of Defense (DoD) and its approved “mission partners.”

The platform sits on a dedicated website, okta.mil, and like its civilian counterpart is aimed at preventing identity theft and other forms of unauthorized use of credentials.

The company’s Vice President of Federal Katy Mann said that “Since obtaining our conditional IL4 Provisional Authorization (PA), Okta has continued to invest in developing identity solutions to help the DoD more easily secure and transform its digital infrastructure, and to create better experiences for its personnel and partners.”

The authorization she’s referring to is a form of clearance allowing Okta to provide the services offered at okta.mil. The company did not provide any financial details of its arrangement with the DoD.

Now what

Providing services to the military — a regular, dependable, and often handsomely paying customer to its favored vendors — can be quite lucrative. So the positive investor reaction to the news was justified and understandable for the specialty tech company, even if we don’t yet know the full scope of the project or the revenue it might bring in.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Okta. The Motley Fool has a disclosure policy.

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