Is Okta Stock a Buy Based on Its Current Valuation?

Aside from adopting a recession-proof dividend growth investing strategy, risk-averse retail investors still interested in tech stocks should put a few criteria on their checklist. Look for high-margin software-as-a–service (SaaS) stocks because conventional wisdom says they are financially in a good position to become profitable (eventually) while maintaining a high-growth tempo. SaaS stocks should be able to maintain high net and gross retention rates, demonstrating an ability to both upsell to and keep existing customers. Finally, it would be preferable if this SaaS stock offered a solution its customers can’t live without that doesn’t involve porn, even when times are hard (no pun intended).

One obvious category is cybersecurity. As the old saying goes, there are two types of companies in the world: those who have been hacked and those who will be hacked. It’s not just anecdotal. More than 80% of companies will experience a data breach (or three) at some point, according to IBM Security’s annual Cost of a Data Breach report. The global average cost of a data breach was $4.35 million in 2022. Just like healthcare, the average cost of a data breach in the United States was much higher than the global average at $9.4 million. Stolen or compromised credentials were not only the most common cause of a data breach but took the longest time to identify at 327 days, IBM Security reported.