Sales reorganizations are usually the corporate equivalent of rearranging deck chairs. But Okta Inc. (OKTA) seems to be pulling off something that actually works. The identity security company's decision to overhaul its sales structure is producing tangible results, from cleaner pipelines to faster deal cycles, and analysts are taking notice.

Needham analyst Mike Cikos is maintaining his Buy rating on Okta with a $110 price target, applying a 5.7x EV/Sales multiple to his fiscal 2027 revenue projections. He acknowledges the execution improvements are real, though investors understandably want proof that increased go-to-market spending will actually drive sustained revenue growth and better customer retention.

The Sales Split That Didn't Crater Everything

Here's the thing about Okta's move to separate its sales teams: everyone expected it to be messy. Splitting the Okta and Auth0 sales forces sounded like the kind of internal disruption that tanks a quarter or two. Instead, the company has consistently beaten its own guidance, suggesting the transition went smoother than anyone anticipated.

Cikos points to higher-quality pipeline, shorter sales cycles, and improved close rates as evidence the strategy is paying off. These productivity gains have given Okta enough confidence to start hiring again, with new sales headcount added in fiscal 2026 and more planned for fiscal 2027.

The stability metrics look good too. Sales rep attrition is down, and average tenure is up, which is exactly what you want to see when you're asking your sales organization to operate differently.

The next phase involves splitting enterprise sales between "Hunters" who chase new customers and "Farmers" who focus on expanding existing accounts. Cikos thinks this move will be less disruptive than the Okta-Auth0 separation and could help balance new customer acquisition with protecting net revenue retention.

AI Security Is Still Early, But Interest Is Building

Don't expect AI security to move the revenue needle in fiscal 2027. Cikos is clear that monetization remains in its infancy. But the strategic momentum is worth watching.

Okta for AI Agents is currently in beta testing, while Auth0 for AI Agents has reached general availability, expanding the company's presence in securing AI-driven workloads. Management disclosed that more than 100 customers representing over $200 million in annual recurring revenue are already working with Okta on AI security initiatives. That's early-stage traction, but it signals genuine enterprise interest.

The Numbers Look Solid

Okta reported third-quarter fiscal 2026 results in early December that showed steady progress. Revenue hit $742 million, up 12% year over year, while adjusted earnings came in at 82 cents per share. Remaining performance obligations climbed 17% to $4.29 billion, indicating healthy forward demand.

The balance sheet looks comfortable. Okta generated $211 million in free cash flow during the quarter and ended with $2.46 billion in cash, giving it plenty of financial flexibility as it invests in sales expansion and AI security development.

OKTA Price Action: Okta shares were up 0.35% at $90.91 at the time of publication on Friday.