Apple Reliance Will Constrain Market Reach Despite Partial Recovery

Key Takeaways

• Heavy reliance on Apple's ecosystem poses risk to growth, especially as mixed-device use rises and Apple's own management tools evolve.
  
• Rising compliance, cloud, and R&D costs, alongside macroeconomic and regulatory pressures, may constrain margins and slow long-term earnings growth.
  
• Reliance on Apple, rising competition, regulatory costs, and industry consolidation threaten Jamf's profitability, revenue growth, and long-term customer retention.

Catalysts

Provides management and security solutions for Apple platforms in the Americas, Europe, the Middle East, India, Africa, and the Asia Pacific.

• While Jamf is positioned to benefit from the ongoing adoption of Apple devices in the enterprise and educational sectors, the increasing prevalence of mixed-device environments in enterprises risks capping the company's future addressable market and puts pressure on its core Apple-centric value proposition, potentially limiting long-term revenue growth.
  
• Although rising enterprise focus on endpoint security and compliant mobile device management aligns with Jamf's expanding platform, rapidly evolving regulatory burdens and heightened data privacy requirements could drive up compliance costs, which would adversely impact net margins over time.
  
• While Jamf's move into dynamic identity and security solutions through the Identity Automation acquisition has the potential to drive higher average revenue per user and better customer retention, dependence on Apple's ecosystem exposes Jamf to platform risk if Apple strengthens its native management tools or alters APIs, which could negatively affect revenue and earnings durability.
  
• Despite international expansion and a channel-first strategy fueling recurring revenue, macroeconomic headwinds-especially education budget constraints and geopolitical uncertainty-could result in delayed purchasing cycles and softer commercial demand, therefore constraining net new ARR and operating income growth.
  
• While investments in cloud delivery, automation and unified endpoint management are designed to support sticky, high-margin SaaS revenues, rapidly rising cloud infrastructure costs and ongoing sector innovation cycles may require greater R&D and operational investment just to maintain product relevance, posing a threat to both gross margin and long-term earnings growth.

Jamf Holding Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more pessimistic perspective on Jamf Holding compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
• The bearish analysts are assuming Jamf Holding's revenue will grow by 8.9% annually over the next 3 years.
• The bearish analysts are not forecasting that Jamf Holding will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Jamf Holding's profit margin will increase from -7.4% to the average US Software industry of 13.5% in 3 years.
• If Jamf Holding's profit margin were to converge on the industry average, you could expect earnings to reach $112.0 million (and earnings per share of $0.77) by about August 2028, up from $-47.4 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 17.1x on those 2028 earnings, up from -20.4x today. This future PE is lower than the current PE for the US Software industry at 38.7x.
• Analysts expect the number of shares outstanding to grow by 3.31% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.67%, as per the Simply Wall St company report.

Jamf Holding Future Earnings Per Share Growth

Risks

• Growing competition from established unified endpoint management vendors and new entrants could pressure Jamf to increase sales and marketing spending or lower prices, potentially eroding earnings and market share in the long term.
  
• The increasing complexity and regulatory requirements around data privacy globally, together with the need for continual compliance investments, may lead to higher operational costs and negatively affect net margins for Jamf.
  
• Persistent macroeconomic caution, particularly within education and commercial sectors, as evidenced by pipeline hesitancy and budget pressures, may suppress IT spending growth and limit revenue expansion, especially if customers delay device refreshes or scale back technology investments.
  
• Jamf's strong reliance on the Apple ecosystem exposes it to concentrated risk, as any significant change by Apple to its management tools or APIs could diminish Jamf's differentiation and ability to sustain revenue growth and pricing power.
  
• The industry trend toward integration and consolidation of endpoint management and security within broader IT platforms may marginalize specialized providers like Jamf, threatening retention rates and limiting Jamf's ability to grow recurring revenues if large customers shift to bundled solutions from platform competitors.

Valuation

• The assumed bearish price target for Jamf Holding is $10.0, which represents the lowest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Jamf Holding's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $27.0, and the most bearish reporting a price target of just $10.0.
  
• In order for you to agree with the bearish analysts, you'd need to believe that by 2028, revenues will be $829.3 million, earnings will come to $112.0 million, and it would be trading on a PE ratio of 17.1x, assuming you use a discount rate of 9.7%.
  
• Given the current share price of $7.33, the bearish analyst price target of $10.0 is 26.7% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.