Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent our lives looking for two things in a stock: a business with a durable competitive advantage, and a price that leaves room to be wrong. Okta gives us roughly half of the first and none of the second. This is a genuinely useful company — the largest independent identity platform in the world, with real switching costs, a fine balance sheet, and free cash flow margins north of 30%. It is also a company whose growth has decelerated from 56% to a guided 9–10% in five years, whose pricing power is capped by the largest software company on earth giving away a "good enough" substitute, whose trust asset — the only brand that matters in security — has been dented by repeated breaches, and whose reported free cash flow depends on treating more than half a billion dollars a year of stock compensation as if it were free.
Recent filings analysed: 10-K (2026-03-05), 10-Q (2025-12-03), 10-Q (2025-08-27), 10-Q (2025-05-28).
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