JFrog (FROG) AI Stock Analysis

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JFrog

(NASDAQ:FROG)

Rating:68Neutral

Price Target:

$47.00

▲(11.24%Upside)

JFrog's overall score reflects strong financial execution with significant revenue growth and cash flow improvements, supported by positive earnings call sentiments. However, profitability challenges and technical overbought conditions weigh on the score, highlighting areas for caution. The corporate event of CEO's dual role approval boosts leadership confidence but has a lesser impact on the overall score.

Positive Factors

Market Positioning

JFrog is positioned as one of the few emerging DevOps platforms as the market shifts towards a curated selection of enterprise platforms.

Revenue Growth

Cloud revenue showed significant growth, accelerating to 42% year-over-year.

Strategic Partnerships

Strategic partnership with Microsoft GitHub has advanced to a joint go-to-market effort, creating a substantial pipeline.

Negative Factors

Cloud Revenue

Cloud revenue strength was partially driven by over-commitment consumption, and management cautioned that this may not signal a sustainable trend amid macro uncertainty.

Guidance and Estimates

Management has prudently de-risked the second half estimates despite the uncertain environment, showing confidence in stability.

JFrog (FROG) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$4.84B

Dividend YieldN/A

Average Volume (3M)901.60K

Price to Earnings (P/E)―

Beta (1Y)1.47

Revenue Growth21.66%

EPS Growth-50.24%

CountryUS

Employees1,600

SectorTechnology

Sector Strength94

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.20

Shares Outstanding114,570,946

10 Day Avg. Volume855,074

30 Day Avg. Volume901,598

Financial Highlights & Ratios

PEG Ratio4.57

Price to Book (P/B)5.73

Price to Sales (P/S)0.00

P/FCF Ratio38.79

Enterprise Value/Market Cap0.95

Enterprise Value/Revenue2.73

Enterprise Value/Gross Profit13.37

Enterprise Value/Ebitda-16.45

Forecast

1Y Price Target

$44.62

Price Target Upside5.61% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering15

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 makes money primarily through the sale of subscription-based licenses for its software solutions. The company's revenue model is centered around annual or multi-year subscriptions that give customers access to its suite of DevOps tools. JFrog offers various subscription tiers, which cater to different organizational sizes and needs, from small startups to large enterprises. Additional revenue is generated from professional services such as training, support, and consulting, which help clients optimize their use of JFrog products. The company also benefits from strategic partnerships and integrations with major cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform, which enhance its product offerings and extend its market reach.

JFrog Key Performance Indicators (KPIs)

Any

Gross Profit by Segment

Gross Profit by Segment
Shows profitability across various business segments, highlighting strengths and potential areas for cost management or improvement.

Chart InsightsJFrog's Subscription Self-Managed and SaaS segment shows consistent growth, reflecting the company's strategic focus on cloud services, which aligns with the 42% year-over-year cloud revenue increase. The License Self-Managed segment, while more volatile, has recently rebounded, suggesting renewed interest or strategic shifts. The earnings call highlights robust financial health, with a 22% revenue increase and strong cash flow, but also notes challenges like extended sales cycles due to macroeconomic uncertainties. The launch of JFrog ML and partnerships like the one with Hugging Face could drive future growth despite these headwinds.

Data provided by:

Main Street Data

JFrog Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 19.82%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Positive

The earnings call reflected a strong start to the fiscal year with significant revenue growth, increased customer base, and strategic partnerships enhancing the product offerings. However, there are challenges with extended sales cycles and macroeconomic uncertainties impacting the future outlook. Despite these challenges, the positive achievements and growth suggest a cautiously optimistic outlook.

Q1-2025 Updates

Positive Updates

Strong Revenue Growth

JFrog's total revenue for Q1 2025 was $122.4 million, up 22% year-over-year. Cloud revenue for the quarter was $52.6 million, representing a 42% year-over-year growth. The growth in cloud revenue was driven by increased customer usage beyond contractual commitments.

Increased Customer Base

JFrog's greater than $1 million customers grew to 54 compared to 40 in the previous year, a 35% increase. Customers spending more than $100,000 annually grew to 1,051 compared to 911 last year, a 15% increase.

Launch of JFrog ML

JFrog announced that all cloud enterprise customers now have access to JFrog ML, providing machine learning and model management technologies as part of their software supply chain solution.

Strong Operating Margin and Cash Flow

Operating margin for Q1 was 17.4%, demonstrating a commitment to profitable growth. Cash flow from operations was $28.8 million, with free cash flow reaching $28.1 million, or a 23% margin.

Major Partnership with Hugging Face

JFrog partnered with Hugging Face to secure their repository of 1.5 million open-source ML models, providing greater peace of mind for developers creating AI-powered applications.

Negative Updates

Extended Sales Cycles and Delayed Decisions

Purchasing and budget constraints across the portfolio persist, resulting in longer sales cycles and delayed decisions to convert into higher usage tiers.

Uncertain Macroeconomic Environment

The guidance for the full year does not fully capture the Q1 outperformance due to the volatile macroeconomic environment, which has grown more uncertain relative to the beginning of the fiscal year.

Company Guidance

In the first quarter of fiscal year 2025, JFrog reported robust financial results, with total revenue reaching $122.4 million, marking a 22% year-over-year increase. The company's cloud revenue grew significantly by 42% year-over-year to $52.6 million, contributing to 43% of total revenue, driven by heightened customer data consumption. JFrog's operating margin improved to 17.4%, showing a commitment to profitable growth amid market uncertainty. The number of customers spending over $1 million annually rose to 54, a 35% increase from the previous year, while those spending more than $100,000 grew to 1,051, a 15% rise. The company maintained a strong net dollar retention rate of 116%, with gross retention at 97%. In terms of cash flow, JFrog generated $28.8 million from operations, resulting in free cash flow of $28.1 million or a 23% margin. Despite these positive developments, JFrog exercised caution in its future outlook due to ongoing macroeconomic uncertainties, projecting total revenues for the full year 2025 to be between $500 million and $505 million, with non-GAAP operating income expected to range from $74 million to $77 million.

JFrog Financial Statement Overview

Summary

JFrog demonstrates strong revenue growth and cash flow generation, which are key strengths in the software application industry. The company maintains a solid balance sheet with low leverage. However, persistent net losses and negative profit margins indicate ongoing profitability challenges that need addressing to enhance shareholder value.

Income Statement

Positive

JFrog has shown consistent revenue growth, with a TTM increase from $428.5M to $450.6M, indicating a healthy upward trajectory. However, profitability remains a challenge as reflected in negative EBIT and EBITDA margins. The gross profit margin is strong, but net profit margin is negative due to ongoing net losses, pointing to areas needing cost control improvements.

Balance Sheet

Positive

The company's balance sheet is solid with a low debt-to-equity ratio, suggesting prudent financial management and low leverage risk. Stockholders' equity has grown steadily, reflecting strong asset management. However, the consistent net losses impact the return on equity, which remains negative, indicating challenges in generating returns for shareholders.

Cash Flow

Positive

Cash flow from operations has improved significantly, indicating strong cash generation capability. Free cash flow growth is positive, with a healthy free cash flow to net income ratio, showing efficient conversion of income into cash. Despite high investing cash outflows, the overall cash flow position is robust, offering flexibility for future investments.

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
EBITDA	-69.64M	-60.24M	-75.19M	-59.62M	-10.53M
Net Income	-69.24M	-61.26M	-90.18M	-64.20M	-9.40M
Balance Sheet
Total Assets	1.13B	972.56M	871.22M	852.53M	689.23M
Cash, Cash Equivalents and Short-Term Investments	522.01M	545.01M	443.20M	421.13M	598.06M
Total Debt	13.98M	22.23M	23.96M	27.31M	0.00
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

Technical Analysis Sentiment

Positive

Last Price42.25

Price Trends

50DMA

41.86

Positive

100DMA

37.54

Positive

200DMA

34.76

Positive

Market Momentum

MACD

-0.18

Positive

RSI

55.09

Neutral

STOCH

48.73

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 42.25 is above the 20-day moving average (MA) of 41.81, above the 50-day MA of 41.86, and above the 200-day MA of 34.76, indicating a bullish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 55.09 is Neutral, neither overbought nor oversold. The STOCH value of 48.73 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 (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALRM	77 Outperform	$2.75B	23.40	17.27%	―	6.72%	43.44%
FRSH	72 Outperform	$4.31B	―	-6.85%	―	20.46%	39.37%
FROG	68 Neutral	$4.84B	―	-10.47%	―	21.66%	-50.24%
ASAN	64 Neutral	$3.53B	―	-83.36%	―	9.84%	13.74%
BRZE	63 Neutral	$3.21B	―	-22.82%	―	22.66%	21.20%
GBTG	60 Neutral	$3.03B	―	-3.84%	―	4.82%	73.90%
Sector *	51 Neutral	AU$1.60B	2.35	-31.50%	3.04%	16.21%	-7.40%

* Technology Sector Average

Performance Comparison

FROG

JFrog

42.25

4.38

11.57%

ALRM

Alarm

55.32

-12.38

-18.29%

ASAN

Asana

15.01

0.72

5.04%

GBTG

Global Business Travel Group

6.32

-0.58

-8.41%

FRSH

Freshworks

14.62

1.51

11.52%

BRZE

Braze

28.88

-10.60

-26.85%

JFrog Corporate Events

Executive/Board ChangesShareholder Meetings

JFrog Approves CEO’s Dual Role in AGM

Positive

May 22, 2025

On May 20, 2025, JFrog Ltd. held its annual general meeting where several key proposals were voted on and passed. These included the re-election of directors, the re-appointment of independent auditors, and various changes to executive and board compensation policies. Additionally, the meeting approved Shlomi Ben Haim’s dual role as CEO and Chairman for three years, reflecting shareholder support for the company’s leadership and strategic direction.

The most recent analyst rating on (FROG) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on JFrog stock, see the FROG Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: May 23, 2025