Software companies Okta Inc. and Atlassian Corp. have been added to the list of “zombie” stocks compiled by equity research firm New Constructs.
In the note, which was released before Okta’s third-quarter results last week, New Constructs warned that cash burn is an issue for the identity software company. “No matter how you analyze Okta’s business, one thing is clear: the company burns through a large amount of cash,” Trainer wrote. “Since fiscal 2018, the company has burned $3.8 billion in FCF [free cash flow] excluding acquisitions.”Okta has endured a turbulent year marked by salesforce difficulties and a hack dubbed “Oktapus.
On Nov. 4, Atlassian’s stock suffered its worst day ever, weighed down by an earnings and revenue outlook that fell short of Wall Street expectations and wiping nearly $13 billion off the software company’s valuation. Atlassian hit a 52-week low of $113.86 on Nov. 21.Atlassian, which makes software programs such as Jira, has seen its stock fall 67.2% in 2022.