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JFrog (FROG)
NASDAQ:FROG
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JFrog
(NASDAQ:FROG)
73Outperform
Positive Factors
Earnings
JFrog delivered a solid quarter, closing with 19% year-over-year revenue growth, driven by 37% year-over-year cloud growth and increasing security traction.
Partnerships
The deepening partnership with AWS suggests further upside potential for JFrog as cloud migrations continue to be a core driver.
Product Adoption
JFrog is considered mission critical, which should drive strong adoption of its products over the medium-term.
Negative Factors
Conservative Guidance
JFrog's guidance philosophy has become more conservative, potentially affecting analyst expectations and market perceptions.
Customer Metrics
Bears may focus on the $1.3 million database contribution in the fourth quarter or total customer count as potential concerns.
Valuation
Attractive valuations at ~7x EV/CY26E Sales & 25x EV/FCF may not appeal to all investors, potentially limiting stock price appreciation.
JFrog (FROG) vs. S&P 500 (SPY)
Market Cap
$3.84B
Dividend YieldN/A
Average Volume (3M)1.21M
Price to Earnings (P/E)―
Beta (1Y)1.58
Revenue Growth22.47%
EPS Growth-5.48%
CountryUS
Employees1,600
SectorTechnology
Sector Strength51
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.63
Shares Outstanding112,878,050
10 Day Avg. Volume616,428
30 Day Avg. Volume1,206,955
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)8.95
Price to Cash Flow (P/CF)19.50
P/FCF Ratio19.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$44.13Price Target Upside29.87% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
JFrog Business Overview & Revenue Model
Company DescriptionJFrog Ltd. provides DevOps platform in the United States. The company's products include JFrog Artifactory, a package repository that allows teams and organizations to store, update, and manage their software packages at any scale; JFrog Pipelines, an integration/continuous delivery tool for automating and orchestrating the movement of software packages; JFrog Xray, which scan JFrog Artifactory; and JFrog Distribution that provides software package distribution with enterprise-grade performance. Its products include JFrog Artifactory Edge that utilizes and leverages metadata from JFrog Artifactory to facilitate the transfer of the incremental changes in software packages from their previous versions; JFrog Mission Control, a platform control panel that provides a view of moving pieces of an organization's software supply chain workflow; JFrog Insight, a DevOps intelligence tool; and JFrog Connect, a device management solution that allows companies to manage software updates and monitor performance across IoT device fleets from anywhere in the world. The company's products also comprise JFrog Pro, JFrog Pro Team, JFrog Pro X, JFrog Enterprise, JFrog Enterprise X, and JFrog Enterprise Plus products that offer ongoing updates, upgrades, and bug fixes, as well as cluster configuration, multi-site replication, and SLA support. It serves technology, financial services, retail, healthcare, and telecommunications organizations. JFrog Ltd. was incorporated in 2008 and is headquartered in Sunnyvale, California.
How the Company Makes MoneyJFrog generates revenue primarily through subscription fees from its cloud-based and on-premises software solutions. Customers pay for access to JFrog's suite of DevOps tools, which are offered under various pricing tiers depending on the scale and specific needs of the client. The company also offers professional services, including training and consulting, which contribute to its earnings. Additionally, JFrog has established strategic partnerships with major cloud providers and technology companies, enhancing its market reach and customer base. These collaborations help drive sales and adoption of JFrog's products, further supporting its revenue streams.
JFrog Financial Statement Overview
Summary
JFrog shows strong revenue growth and a solid cash flow position, which are positive indicators for future prospects. However, the company needs to address its profitability issues, as evidenced by negative net and EBIT margins. A strong balance sheet with substantial equity and low debt provides a stable financial foundation, but improving operational efficiency and profitability remains critical for long-term success.Income Statement
JFrog has demonstrated consistent revenue growth, with a significant increase from $349.89M in 2023 to $428.49M in 2024, representing a growth rate of approximately 22.44%. However, the company has struggled with profitability, as indicated by negative net and EBIT margins. In 2024, the gross profit margin was strong at 77.06%, but the net profit margin was negative at -16.16%, and the EBIT margin was also negative at -21.25%.75
Positive
Balance Sheet
The company maintains a healthy equity position with an equity ratio of 68.45% in 2024, indicating a strong capital base. However, the debt-to-equity ratio is low at 0.02, which suggests conservative leverage, but the negative net income impacts ROE, which is -8.95%. JFrog's balance sheet reflects stability with substantial cash reserves, but improvement in profitability is needed.65
Positive
Cash Flow
JFrog's cash flow performance is commendable, with a significant increase in free cash flow from $72.17M in 2023 to $107.78M in 2024, marking a growth rate of 49.34%. The company's operating cash flow to net income ratio is robust at -1.60, reflecting efficient cash flow generation despite net losses. The free cash flow to net income ratio is also strong at -1.56.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 428.49M | 349.89M | 280.04M | 206.68M | 150.83M | Gross Profit |
| 330.19M | 272.84M | 217.75M | 164.86M | 122.38M | EBIT |
| -91.10M | -75.55M | -89.84M | -68.37M | -14.19M | EBITDA |
| -91.10M | -60.24M | -75.19M | -59.62M | -10.53M | Net Income Common Stockholders |
| -69.24M | -61.26M | -90.18M | -64.20M | -9.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 522.01M | 545.01M | 443.20M | 421.13M | 598.06M | Total Assets |
| 1.13B | 972.56M | 871.22M | 852.53M | 689.23M | Total Debt |
| 13.98M | 22.23M | 23.96M | 27.31M | 0.00 | Net Debt |
| -35.89M | -62.54M | -21.63M | -40.98M | -164.46M | Total Liabilities |
| 356.38M | 293.43M | 246.45M | 213.95M | 135.34M | Stockholders Equity |
| 773.53M | 679.12M | 624.77M | 638.58M | 553.89M |
| Cash Flow | Free Cash Flow | |||
| 107.78M | 72.17M | 16.80M | 23.07M | 25.94M | Operating Cash Flow |
| 110.92M | 74.16M | 21.43M | 27.90M | 29.46M | Investing Cash Flow |
| -165.36M | -53.48M | -53.34M | -125.55M | -311.80M | Financing Cash Flow |
| 21.23M | 18.37M | 11.03M | 1.44M | 406.13M |
JFrog Technical Analysis
Positive
33.98
Price Trends
35.38
Negative
33.06
Positive
32.27
Positive
Market Momentum
-0.55
Positive
48.37
Neutral
73.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FROG, the sentiment is Positive. The current price of 33.98 is below the 20-day moving average (MA) of 34.87, below the 50-day MA of 35.38, and above the 200-day MA of 32.27, indicating a neutral trend. The MACD of -0.55 indicates Positive momentum. The RSI at 48.37 is Neutral, neither overbought nor oversold. The STOCH value of 73.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FROG.
JFrog Risk Analysis
JFrog disclosed 70 risk factors in its most recent earnings report. JFrog reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
JFrog Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $3.84B | ― | -9.53% | ― | 22.47% | -5.48% | |
73 Outperform | $31.75B | ― | -1.21% | ― | 27.77% | 89.39% | |
73 Outperform | $89.79B | 721.64 | -0.69% | ― | 29.39% | -119.62% | |
69 Neutral | $19.75B | 1,940.96 | 0.46% | ― | 15.33% | ― | |
66 Neutral | $36.00B | 204.54 | 7.75% | ― | 26.12% | 274.50% | |
58 Neutral | $22.11B | 10.47 | -17.86% | 2.40% | 4.75% | -24.81% | |
57 Neutral | $59.56B | ― | -32.59% | ― | 23.19% | 11.01% |
* Technology Sector Average
Performance Comparison
FROG
JFrog
34.64
-8.48
-19.67%
TEAM
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234.62
41.36
21.40%
OKTA
Okta
116.38
10.73
10.16%
ZS
Zscaler
209.87
15.80
8.14%
CRWD
CrowdStrike Holdings
372.64
47.88
14.74%
DDOG
Datadog
110.17
-12.49
-10.18%
JFrog Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -9.89% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
JFrog Ltd. demonstrated strong revenue growth, particularly in the cloud and security segments, with significant enterprise market focus. However, there is cautious guidance for 2025, with macroeconomic and regulatory uncertainties affecting customer decisions. Overall, the positive achievements outweigh the challenges.Highlights
Strong Revenue Growth
Total revenue for 2024 was $428.5 million, up 22% year over year, with cloud revenue growing 41% year over year to $168 million.
Cloud Segment Success
Fourth quarter cloud revenues were $49.4 million, up 37% year over year, driven by large customer wins and migrations to a new enhanced cloud database product.
Significant Security Adoption
Advanced security and curation were adopted by approximately 250 customers, with security core products contributing to 5% of ARR and 12% of RPO.
Enterprise Market Focus
Customers with ARR over $100,000 grew to 1,018, up from 886 in the year-ago period, and those with ARR over $1 million increased to 52, up from 37.
MLOps Expansion
Acquired Quack AI, making JFrog the first to unify DevOps, DevSecOps, and MLOps within a single platform.
Record Free Cash Flow
Achieved a record quarter with $48.5 million in free cash flow, representing a 42% margin for Q4.
Lowlights
Conservative Guidance for 2025
Guidance for 2025 is more conservative, with expectations of 17% revenue growth and mid-teens net dollar retention.
Slowdown in On-Prem Revenue
Self-managed or on-prem revenues were $66.7 million in Q4, with full-year growth of only 13% year over year.
Macro and Regulatory Uncertainties
Customers remain hesitant due to macroeconomic conditions and potential regulatory changes impacting AI adoption.
Company Guidance
During the call, JFrog Ltd. provided detailed guidance and metrics for the fiscal year 2024, highlighting a total revenue of $428.5 million, which represented a 22% year-over-year growth. Cloud revenue reached $168 million, showing a 41% increase from the previous year. The company's gross margin for the year was 83.8%, with a strong free cash flow of $107.8 million, equating to a 25% free cash flow margin. Fourth quarter revenues were $116.1 million, up 19% year-over-year, with cloud revenues growing to $49.4 million, representing 43% of total revenues for the quarter. JFrog Ltd. reported significant enterprise growth, with customers having ARR over $100,000 increasing to 1,018 and those exceeding $1 million rising to 52. Looking ahead, the company projected a conservative estimate for 2025, with full-year revenues anticipated to be between $499 million and $503 million, reflecting a 17% year-over-year growth at the midpoint, and cloud growth expected between 30% to 32%.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.