Okta's (OKTA) improved its outlook for H2 revenue and remaining performance obligations on "strong" Q2 results but is still "being prudent" around expectations, UBS said in a Tuesday note.

Okta sounded more confident in its ability to boost growth, UBS analysts said, as the company cited its better-than-expected Q2 performance and upside from go-to-market improvements made earlier in the year.

The company also showed more optimism on its offerings for securing generative AI and AI agents with the introduction of Cross App Access, while its planned acquisition of Axiom provides advanced functionality around security for non-human identities, the analysts said.

Okta's net revenue retention remains stable at 106%, and the company sounded confident that the impact of COVID-related headwinds has bottomed out, the analysts said. Based on the trailing-twelve-months nature of the metric, the analysts said they expect net revenue retention to have more material increases in fiscal 2027.

UBS' rating on the company's stock is buy with a price target of $130.

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