Monday.com vs. Okta: Which Technology Stock Is a Better Buy in 2027?
As enterprise digital transformation accelerates, choosing between high-growth productivity tools and essential security infrastructure is a classic dilemma. Should you invest in monday.com(NASDAQ:MNDY) or Okta(NASDAQ:OKTA) for the long haul?
monday.com offers a highly flexible work operating system used for project management and sales. Okta provides the critical security layer that manages user identities across thousands of cloud applications.
Comparing them helps investors decide between a fast-expanding productivity platform and an established security specialist.
The case for monday.com
monday.com sells a flexible platform that allows teams to create custom workflows for project management, software development, and customer relationship management.
The company recently leaned into its AI work platform to automate routine tasks for more than 250,000 customers, according to its annual report on Form 20-F as of Dec. 31, 2025. In the competitive world of tech stocks, this scale is a significant asset.
The annual report, filed on March 13, 2026, shows robust scaling. In the fiscal year ended Dec. 31, 2025, revenue reached nearly $1.2 billion, up about 26.7% year over year. The company also reported net income of nearly $118.7 million, yielding a net margin of roughly 9.6%.
About $61.2 million of that profit was a non-cash income tax benefit from reversing a valuation allowance on deferred tax assets, so underlying earnings were closer to $57.6 million.
The balance sheet appears healthy. monday.com carries no borrowings, so on a borrowings-only basis, its debt-to-equity ratio, which measures total debt against shareholder equity, is zero. Its largest long-term obligation is operating leases, which equaled roughly 0.14x equity at year-end.
Its current ratio, which compares short-term assets to liabilities, is about 2.5x. For the fiscal year ended Dec. 31, 2025, free cash flow reached about $309.9 million, calculated as operating cash flow minus capital expenditures and capitalized software.
However, stock-based compensation made up roughly 53.1% of operating cash flow. Because stock-based compensation is a non-cash expense added back to cash flow on the cash flow statement, it inflates reported cash generation.
The newer numbers show growth cooling. In the second quarter of 2026, ended June 30, revenue rose 22% to $364.6 million, and management guided third-quarter revenue to $368 million to $370 million, or 16% to 17% growth.
In July, the company announced a restructuring that would cut about 20% of its workforce, with expected net charges of $45 million to $55 million, and now expects a full-year non-GAAP operating margin of about 16%. One bright spot in the quarter was that annual recurring revenue from AI products doubled from the first quarter and made up 17% of net new ARR.
The company also used up its remaining $870 million buyback authorization during the quarter. On Oct. 19, it launched Harmony, a voice AI agent platform for enterprise sales teams. Third-quarter results are due Nov. 9.
The case for Okta
Okta specializes in identity and access management, helping organizations secure their workforce and customers.
The platform integrates with major services like Amazon(NASDAQ:AMZN), ServiceNow(NYSE:NOW), and Palo Alto Networks(NASDAQ:PANW) to ensure only authorized users can access sensitive data.
The company says two-thirds of the Fortune 100 use its platform, and its annual report counts more than 20,000 customers, including 5,100 with annual contract value above $100,000, as of Jan. 31, 2026.
Scale remains a primary advantage for the security firm, according to its Form 10-K annual report filed March 5, 2026. In the fiscal year ended Jan. 31, 2026, revenue reached nearly $2.9 billion, up nearly 11.8% from the prior fiscal year. Net income was approximately $235.0 million, for a net margin of roughly 8.1%.
Okta ended fiscal 2026 with $350 million of convertible notes against about $7.0 billion of shareholders' equity, a debt-to-equity ratio of roughly 0.05x on a borrowings-only basis.
Its current ratio, which compares short-term assets to liabilities, is approximately 1.4x. For the fiscal year ended Jan. 31, 2026, the company's own reconciliation showed robust free cash flow of $863 million, providing significant capital for reinvestment.
The quarter ended July 31, 2026, kept that pattern. Revenue grew 11% to $805 million, and free cash flow was $227 million, or 28% of revenue.
Current remaining performance obligations rose 14%, suggesting contracted business due within the next year is still growing faster than revenue.
Okta settled the remaining $350 million of its 2026 notes in cash and repurchased $372 million of stock in the first half of the fiscal year. Management raised its full-year outlook to $3.216 billion to $3.226 billion in revenue and $910 million to $930 million in free cash flow.
Risk profile comparison
monday.com faces risks from intense competition in the work management software market. While the company is growing fast, it must continuously innovate to prevent customers from switching to rival platforms.
Because a large share of its customers are small businesses, it may also be sensitive to shifts in the broader economy. The July restructuring adds execution risk, since the company must maintain product momentum while a fifth of its staff departs.
The annual report also discloses a putative securities class action filed March 10, 2026, in the U.S. District Court for the Southern District of New York against the company and certain directors and officers.
Okta must contend with the massive footprint of Microsoft(NASDAQ:MSFT), which offers its own identity solutions bundled with enterprise software and which Okta's annual report names as its principal competitor.
The company is also a high-value target for sophisticated cyberattacks, and past security incidents have shown that breaches can harm its reputation.
Future service outages could erode trust among large enterprise clients who rely on it for security.
Valuation comparison
monday.com currently trades at a lower valuation than its peer, making it appear more attractive based on both its P/S ratio and Forward P/E.
The P/S ratio measures market cap divided by sales over the past twelve months. Forward P/E compares the share price to future earnings estimates for the coming year.
| Metric |
monday.com |
Okta |
|---|---|---|
| Forward P/E |
17.2x |
52.8x |
| P/S ratio |
2.9x |
11.3x |
Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2027?
Okta is the better buy for 2027, though its premium multiple leaves little room for a stumble.
Both companies reported their latest quarters in August, and the quality gap showed.
Okta grew revenue 11% in its fiscal second quarter and raised its full-year outlook. It also paid off its last convertible notes in cash, continued buying back stock, and still turned more than a quarter of revenue into free cash flow.
Management's own forecast calls for a free cash flow margin in the high 20s this year, which is the profile of a business that has settled into steady compounding.
monday.com is cheaper for a reason. Growth slowed to 22% in the second quarter, and management's third-quarter guidance points to a further slowdown.
The July decision to cut about a fifth of the workforce may lift margins, but it also suggests the prior plan outran demand. Roughly half of last year's reported profit came from a one-time tax benefit, so the earnings base is thinner than the headline figure implies.
The shares sit about half below their 52-week high, which starts to look like an opportunity once the AI Work Platform pivot shows up in the growth rate.
I'd rather pay up for Okta's cash generation than wait on that turn. monday.com keeps a loyal customer base and a balance sheet with no borrowings, and it belongs on a watch list for anyone willing to let the restructuring play out first.
Should you buy stock in Monday.com right now?
Before you buy stock in Monday.com, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Monday.com wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $337,166!* Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,339,143!*
Now, it's worth noting Stock Advisor's total average return is 904% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor , and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of October 28, 2026.
Mike Schwenk has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Microsoft, Monday.com, Okta, and ServiceNow. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy .
Monday.com vs. Okta: Which Technology Stock Is a Better Buy in 2027? was originally published by The Motley Fool
