Okta (OKTA) reports earnings on Tuesday with options pricing a 13% move. Historical trends suggest low short interest and positive pre-earnings momentum point to potential gains. With a history of 4% average post-earnings returns and rising sentiment, OKTA may break from its two-quarter losing streak, though volatility remains high.

• Okta is reporting earnings on Tuesday after the close. Okta, Inc. develops internet application software. The stock is down 10% following two consecutive negative earnings reports. • Historically, short interest has been predictive. When short interest rises, the stock tends to decline, and vice versa. Recently, the short interest position is smaller, and when this has happened in the past, the stock has historically appreciated after earnings. • The stock has momentum, with its return the week before earnings typically moving in the same direction as the return the week after. The stock is up slightly before earnings, which has historically correlated with a higher stock price afterward. • Okta’s stock typically moves 10% on earnings and is implied to move 13% according to the options market. On average, the stock appreciates by 4% following earnings, and it has gone up more often than down.

• The graph shows that short interest is at a minimum, reflecting a more bullish sentiment. Historically, a drop in short interest during earnings weeks has correlated with a rising stock price.

• Other stocks in the same industry were either flat or up after their most recent earnings, indicating a positive industry trend. • Given the low short interest, positive momentum, and historical earnings performance, Okta's stock is positioned for a potential upward move after earnings. The 13% implied move in the options market suggests high volatility, but historical trends show that the stock has gone up more often than down after earnings, especially when short interest is low, and momentum is positive. While there is always risk with earnings, especially after two negative reports, the overall outlook leans bullish, supported historical patterns.

With short interest at a minimum, positive momentum, and historical post-earnings gains, Okta (OKTA) appears positioned for a potential rally. However, with implied volatility at 13%, the stock faces significant risks despite bullish signals from its historical trends.

Want to know more?

Access this data in real time using S3’s BLACK APP or Contact us to get started.