Critical Review: Okta (NASDAQ:OKTA) vs. i3 Verticals (NASDAQ:IIIV)

Okta (NASDAQ:OKTA) and i3 Verticals (NASDAQ:IIIV) are both technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Insider & Institutional Ownership

86.6% of Okta shares are held by institutional investors. Comparatively, 84.2% of i3 Verticals shares are held by institutional investors. 4.6% of Okta shares are held by company insiders. Comparatively, 60.1% of i3 Verticals shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Okta and i3 Verticals”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Okta	$3.07 billion	9.65	$235.00 million	$1.66	102.77
i3 Verticals	$218.16 million	2.00	$17.87 million	$0.38	43.68

Okta has higher revenue and earnings than i3 Verticals. i3 Verticals is trading at a lower price-to-earnings ratio than Okta, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Okta has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, i3 Verticals has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Profitability

This table compares Okta and i3 Verticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Okta	9.63%	4.50%	3.34%
i3 Verticals	4.24%	4.49%	3.31%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Okta and i3 Verticals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Okta	0	10	32	1	2.79
i3 Verticals	1	3	3	0	2.29

Okta currently has a consensus target price of $172.92, indicating a potential upside of 1.36%. i3 Verticals has a consensus target price of $25.40, indicating a potential upside of 53.01%. Given i3 Verticals’ higher probable upside, analysts plainly believe i3 Verticals is more favorable than Okta.

Summary

Okta beats i3 Verticals on 12 of the 15 factors compared between the two stocks.

About Okta

Okta, Inc. operates as an identity partner in the United States and internationally. The company offers Okta's suite of products and services used to manage and secure identities, such as Single Sign-On that enables users to access applications in the cloud or on-premises from various devices; Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, web applications, and data; API Access Management enables organizations to secure APIs; Access Gateway enables organizations to extend Workforce Identity Cloud; and Okta Device Access enables end users to securely log in to devices with Okta credentials. It also provides Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization; Lifecycle Management enables IT organizations or developers to manage a user's identity throughout its lifecycle; Okta Identity Governance provides identity access management and identity governance solutions; Advanced Server Access offers access management to secure cloud infrastructure; Okta Privileged Access enables organizations to reduce risk with unified access and governance management for on-premises and cloud resources; and Okta Workforce Identity Workflows. In addition, the company offers Universal Login, which allows customers to provide login experience across different applications and devices; and Attack Protection, a suite of security capabilities that protects customers from different types of malicious traffic. Further, it provides Adaptive Multi-Factor Authentication, Passwordless, Machine to Machine, Private Cloud, Organizations, Actions and Extensibility, and Enterprise Connections. The company sells its products directly to customers through sales force and channel partners. The company was formerly known as Saasure, Inc. Okta, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.

About i3 Verticals

i3 Verticals, Inc. provides integrated payment and software solutions primarily to the public sector and healthcare markets in the United States. It operates in two segments, Software and Services, and Merchant Services. The company offers payment processing services that enables upper and lower court case management, collections, finance and accounting, motor vehicle and carrier registration, e-filing and taxation, license plate inventory, property tax management, utility billing, professional licensing, document workflow, and law enforcement software; assists public schools in completing payment processing functions, including accepting payments for online or at school lunches, and school activities. It also provides software platforms, such as electronic healthcare records and revenue cycle management solutions; insurance adjudication, patient engagement platforms, billing, scheduling, and integrated payments solutions; and workflow software and associated professional services to medical insurance payers. In addition, the company engages in software licenses and subscriptions, transaction-based fees, ongoing software maintenance and support, and other software-related solutions; and payment processing and gateway fees, as well as other related fixed transaction or service fees. Further, it sells equipment, and offers non-software related professional services. The company offers its solutions to clients through direct sales force; distribution partners comprising independent software vendors, independent sales organizations, and value-added resellers. i3 Verticals, Inc. was founded in 2012 and is headquartered in Nashville, Tennessee.