Market reaction to the post-earnings of three firms created a fire sale.
Okta (OKTA), which supplies single sign-on in cybersecurity, posted strong revenue, subscriptions, and subscription backlog growth (called RPO). The RPO growth of 9% Y/Y scared investors. Okta said on its conference call that the recession is here, so its customers cut back deal sizes.
Sales growth from Okta’s existing customer base is slowing. The firm now expects revenue of $2.175B to $2.185B, compared to the $2.17B consensus. OKTA stock lost 12.7% last week. An earnings beat next quarter would reward buyers.
In the retail sector, Dollar General (DG) fell after blaming macro headwinds for its earnings miss. It posted a GAAP EPS of $2.34. Revenue rose by only 6.7% Y/Y to $9.34 billion. The same-store sales increase of 1.6% is troubling. This is far below the inflation rate in the 4.5% to 6.1% range. DG needs to fix its product mix to adjust to changing customer needs. The firm is supposed to thrive during tough economic times.
Advance Auto Parts slashed its dividend by 83.3%. It posted revenue growth of 1.5% Y/Y. It also warned of filing its 10-Q financial statements late. Once the firm files the document, consider AAP stock.
