In a report released today, Shrenik Kothari from Robert W. Baird maintained a Buy rating on JFrog, with a price target of $70.00.
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Shrenik Kothari has given his Buy rating due to a combination of factors that highlight JFrog’s strong financial performance and promising growth prospects. The company has demonstrated a significant increase in its remaining performance obligations, which grew by 46.8% year-over-year, indicating a robust pipeline of future revenue. Additionally, JFrog’s geographic revenue breakdown shows a healthy growth in the United States, which accounts for 60% of its total revenue.
Moreover, the increase in subscription revenue, primarily driven by growth from existing customers, underscores the company’s ability to retain and expand its customer base. The deferred revenue contribution also reflects a substantial portion of recognized revenue, suggesting strong future earnings. Furthermore, the company’s strategic lease commitments and the expectation of recognizing a significant amount of unrecognized stock-based compensation expense over the next few years point to a well-managed financial strategy. The $70 price target, based on an EV/Sales multiple above the peer group average, is justified by the expanding opportunities in AI and security, along with recent execution improvements.
Kothari covers the Technology sector, focusing on stocks such as Tenable Holdings, Elastic, and JFrog. According to TipRanks, Kothari has an average return of 23.5% and a 68.34% success rate on recommended stocks.
In another report released yesterday, Bank of America Securities also reiterated a Buy rating on the stock with a $74.00 price target.