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FROG

JFrog NasdaqGS:FROG Stock Report

Last Price

US$19.28

Market Cap

US$1.9b

7D

-4.2%

1Y

-45.4%

Updated

24 Sep, 2022

Data

Company Financials +

JFrog Competitors

Price History & Performance

Summary of all time highs, changes and price drops for JFrog
Historical stock prices
Current Share PriceUS$19.28
52 Week HighUS$42.33
52 Week LowUS$16.36
Beta0.46
1 Month Change-17.57%
3 Month Change-16.79%
1 Year Change-45.44%
3 Year Changen/a
5 Year Changen/a
Change since IPO-70.24%

Recent News & Updates

Aug 22

JFrog: Strong Earnings Performance But Still Waiting On Price Stabilization

JFrog management provided strong guidance despite macroeconomic and sales cycle challenges. Compelling use cases, cost controls, and ongoing investments support go-forward confidence. Yet, given FROG stock's price action has yet to stabilize, investors will have to continue clinging to patience. JFrog Ltd. (FROG) is a DevOps software company whose suite of products and services promise to deliver software from developer to device without friction. FROG initially received a positive response to its last earnings report. The stock even managed a bullish breakout above its 200-day moving average ((DMA)) (the blue line in the chart below), FROG's first trip into such trading territory. Less than three weeks later, the market returned all the post-earnings gains. The stock market's fickle reaction begs the question: did FROG report positive results with encouraging guidance? I think so. However, companies with little to no profitability in the here and now have a high bar to hurdle over market sentiment. FROG is caught in that sentiment drag so strong results have yet to deliver price stabilization. JFrog Ltd ((FROG)) remains stuck in an extended downtrend. (TradingView.com) Seeking Alpha author Arne Verheyde provided a good summary of the financials and headline guidance. I agree with the conclusion that FROG is reasonably priced for a company with strong prospects to grow revenues through customer retention and new customers convinced by existing, compelling use cases. "Reasonable" is an 8 forward price-to-sales (P/S) ratio and 9 trailing P/S versus what was 15-20 in the 14 months after the IPO. JFrog's valuation is well off the initial highs. (Seeking Alpha) Here I build on Verheyde's conclusions by taking a look at key highlights from the earnings conference call and the earnings presentation. JFrog's Guidance Guidance is the most important part of an earnings release. JFrog provided refreshingly detailed and extensive guidance given the current macro-economic environment typically makes such an exercise very challenging. Management's confidence comes from "an increased demand for our cloud solution, more usage in the cloud coming from new customers and existing customers" and expansion with existing customers. Moreover, the strategic sales teams continues to break company sales records. Even with IT budgets likely facing pressure in the second half, management still sees an underlying long-term 30%+ revenue growth rate. Given this confidence, I am willing to lock in JFrog's guidance story until proven guilty. The key highlights include projections with tight ranges for both Q3 and the full-year which together suggest management has good visibility in the business. Mid-50% baseline growth rate for the cloud business "with potential upside from increased customer usage as we saw in the first half of 2022." (emphasis mine) Gross margins 83% to 84% during H2, trending long-term towards 80% given the higher margin cloud business is grabbing an increasing share of revenue. Breakeven for fiscal year 2022. Q3: revenue $70.5M to $71.5M million, non-GAAP operating profit -$0.5M to +$0.5M, non-GAAP earnings per diluted share -$0.01 to +$0.01 Full fiscal 2022: increased revenue range to $278.5M to $280.5M, non-GAAP operating income -$1M to +$1 million, non-GAAP earnings per diluted share -$0.01 to +$0.01 I did not identify anything alarming in the GAAP to non-GAPP reconciliations reported at the end of the earnings presentation. Management explained why and how the migration to the cloud is boosting JFrog's business, including increasing net revenue retention (and thus supporting confident guidance). The migration to the cloud creates more data transfers, "more binary movements in the cloud between regions, between different deployments." Companies take headcount savings and invest more in JFrog services and even add more capabilities. These customers are transitioning from lower subscriptions to a full cloud platform. Management reported a large range for these upsells of 20% to 80%. The upsell percentage depends on the customer use case. Management provided solid guidance despite acknowledging some small hiccups in the business environment. Indeed, the company assured analysts that it took into account "the current macroeconomic headwinds emerging globally." Specifically, JFrog started to experience longer sales cycles for new, large deals. During the Q&A, management clarified that the longer time to close comes from extra levels of required approvals. I was not clear whether management expects these cycle times to come back down on the other side of the global economic headwinds. Management also identified "slower levels of DevOps adoption" in Asia Pacific, the company's smallest region for revenue. Compelling Use Cases Management's guidance looks even more solid given compelling use cases. The company always provides uses cases in its earnings calls, but these still deserve call-outs given the economic environment and recession fears. Management talked to examples of unidentified companies. The earnings presentation identified three specific companies which include end results. Examples of customer success for JFrog (JFrog Earnings Presentation) I also liked this table explaining why JFrog wins in the marketplace. The choice points and the market differentiation speaks to a solid platform with a lot of runway ahead. JFrog has a compelling case for continuing to win. (JFrog earnings presentation) Cost Control

Aug 14

JFrog: Rock Solid Growth Stock

JFrog has been a very reliable growth software and SaaS company, re-accelerating growth to around 40% over the last year. JFrog's leadership position in liquid software has been rewarded in the market through a sticky land-and-expand model, with over 130% net retention. JFrog maintains its long-term outlook for 30% growth, which makes its 8x P/S very reasonable. Investment Thesis JFrog (FROG) is the leader in the "liquid" model for updating software, which makes its sticky offering the backbone for many (if not most) of the world's largest enterprises. In addition, JFrog has been expanding into security and IoT. Overall, this is a rock-solid growth company at a reasonable valuation that operates near breakeven (but cash flow positive) as it prioritizes growth over near-term profits. Background JFrog is a DevSecOps software and SaaS company that intends to make software “liquid”, which is a more modern approach to updating software. Through acquisitions, the company has also improved its security offering. With just around a $250M run rate, JFrog still has ample runway for growth, which is further evidenced by its over 130% net retention rate. JFrog is also used by 85% of the Fortune 500. Its more nascent cloud offering has also been growing substantially faster than the overall business, which is why I initially wrote that the company reminded me of MongoDB (MDB). Q2 Results For about the last four quarters, JFrog has been able to grow at nearly 40%, and Q2 was no different, with revenue of $68M up 39% YoY. Investors may remember that growth dipped to the low 30s during COVID-19, so the company has successfully executed on its plan to reaccelerate growth. The official long-term guidance is for 30% over time. In addition, Q2 revenue was also up a healthy 8% QoQ. In Q2, JFrog revenues exceeded the midpoint of our guidance by more than 3% for the second straight quarter. And we are excited to report that our strategic sales team, again, broke all-time records with multi-year hybrid, full platform deals signed with some of the world's leading enterprises. (…) Our customers tell us that JFrog is a mission-critical piece in how they [pull] software from public hubs build, manage, secure and distribute it to production. JFrog Artifactory serves their software organization as the single system of record and we continue to see that JFrog is an infrastructure backbone and remains a cornerstone of our customer software delivery processes scale. Net retention came in at 132%. Further, 94% of revenue came from multi-product subscriptions. As mentioned, cloud has been a growth driver, and grew 68% in Q2 to 28% of revenue, up from 24% a year ago. Notably, the growth was also an acceleration from the 63% growth in Q1. Customers with over 100k in ARR (annual recurring revenue) grew 56%. JFrog now also has 17 customers with $1M ARR, up from 12 last year. JFrog Guidance Q3 guidance calls for 5% sequential growth, which would decelerate the revenue growth to 32%. However, JFrog expects a strong(er) Q4 with $77M revenue, finishing the year with 35% revenue growth. Regarding the current macro environment, which JFrog has factored into its guidance, JFrog said it is experiencing elongated sales cycles and Asia Pacific growth below expectations. JFrog did maintain its long-term target for 30% growth, unlike for example Palantir (PLTR), a company valued at over 10x P/S. Valuation JFrog is currently valued at 8x P/S its 2022 exit run rate. For a company growing at 30-40%, although it is not cheap, this does seem a compelling valuation, as the company has guided to continue to grow at 30% for the foreseeable future. That means that in 2-3 years, the valuation may be reduced to just 4x P/S, which would only be justified if the growth rate would materially slow down. However, there is no evidence there would be a material slowdown on the horizon given the elevated cloud growth rate and the historical ~130% net retention rate, proving JFrog has a successful track record of land and expand.

Shareholder Returns

FROGUS SoftwareUS Market
7D-4.2%-4.4%-5.2%
1Y-45.4%-35.3%-23.0%

Return vs Industry: FROG underperformed the US Software industry which returned -35.3% over the past year.

Return vs Market: FROG underperformed the US Market which returned -23.1% over the past year.

Price Volatility

Is FROG's price volatile compared to industry and market?
FROG volatility
FROG Average Weekly Movement6.9%
Software Industry Average Movement9.0%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: FROG is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: FROG's weekly volatility (7%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20081,000Shlomi Haimhttps://www.jfrog.com

JFrog 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.

JFrog Fundamentals Summary

How do JFrog's earnings and revenue compare to its market cap?
FROG fundamental statistics
Market CapUS$1.91b
Earnings (TTM)-US$86.64m
Revenue (TTM)US$244.44m

7.8x

P/S Ratio

-22.1x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
FROG income statement (TTM)
RevenueUS$244.44m
Cost of RevenueUS$53.40m
Gross ProfitUS$191.04m
Other ExpensesUS$277.68m
Earnings-US$86.64m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-0.87
Gross Margin78.15%
Net Profit Margin-35.44%
Debt/Equity Ratio0%

How did FROG perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is FROG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FROG?

Other financial metrics that can be useful for relative valuation.

FROG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue6.2x
Enterprise Value/EBITDA-25.9x
PEG Ration/a

Price to Sales Ratio vs Peers

How does FROG's PS Ratio compare to its peers?

FROG PS Ratio vs Peers
The above table shows the PS ratio for FROG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average4.6x
PRGS Progress Software
3.1x5.4%US$1.8b
NABL N-able
4.5x11.9%US$1.6b
CVLT Commvault Systems
2.9x5.7%US$2.3b
PING Ping Identity Holding
7.9x17.6%US$2.4b
FROG JFrog
7.8x23.5%US$1.9b

Price-To-Sales vs Peers: FROG is expensive based on its Price-To-Sales Ratio (7.8x) compared to the peer average (4.6x).


Price to Earnings Ratio vs Industry

How does FROG's PE Ratio compare vs other companies in the US Software Industry?

Price-To-Sales vs Industry: FROG is expensive based on its Price-To-Sales Ratio (7.8x) compared to the US Software industry average (4.3x)


Price to Sales Ratio vs Fair Ratio

What is FROG's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FROG PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio7.8x
Fair PS Ratio8.4x

Price-To-Sales vs Fair Ratio: FROG is good value based on its Price-To-Sales Ratio (7.8x) compared to the estimated Fair Price-To-Sales Ratio (8.4x).


Share Price vs Fair Value

What is the Fair Price of FROG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FROG ($19.28) is trading below our estimate of fair value ($21.88)

Significantly Below Fair Value: FROG is trading below fair value, but not by a significant amount.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is JFrog forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


23.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FROG is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: FROG is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: FROG is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: FROG's revenue (23.5% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: FROG's revenue (23.5% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FROG's Return on Equity is forecast to be low in 3 years time (3.2%).


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Past Performance

How has JFrog performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-70.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FROG is currently unprofitable.

Growing Profit Margin: FROG is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: FROG is unprofitable, and losses have increased over the past 5 years at a rate of 70.9% per year.

Accelerating Growth: Unable to compare FROG's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: FROG is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (18.3%).


Return on Equity

High ROE: FROG has a negative Return on Equity (-13.85%), as it is currently unprofitable.


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Financial Health

How is JFrog's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Stable Cash Runway

  • Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: FROG's short term assets ($510.2M) exceed its short term liabilities ($193.7M).

Long Term Liabilities: FROG's short term assets ($510.2M) exceed its long term liabilities ($38.5M).


Debt to Equity History and Analysis

Debt Level: FROG is debt free.

Reducing Debt: FROG has not had any debt for past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable FROG has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: FROG is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 23.8% per year.


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Dividend

What is JFrog current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate FROG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate FROG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if FROG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if FROG's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as FROG has not reported any payouts.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average management tenure


CEO

Shlomi Haim (52 yo)

14.42yrs

Tenure

US$3,361,202

Compensation

Mr. Shlomi Ben Haim serves as Co-Founder and Chief Executive Officer at JFrog Inc since April 2008. Prior to this, he served as the Chief Executive Officer of AlphaCSP that was acquired by the biggest IT g...


CEO Compensation Analysis

Compensation vs Market: Shlomi's total compensation ($USD3.36M) is below average for companies of similar size in the US market ($USD5.62M).

Compensation vs Earnings: Shlomi's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: FROG's management team is considered experienced (4 years average tenure).


Board Members

Experienced Board: FROG's board of directors are considered experienced (5.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: FROG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

NasdaqGS:FROG Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
02 Sep 22SellUS$20,820Tali NotmanIndividual1,051US$19.81
02 Sep 22SellUS$31,022Jacob ShulmanIndividual1,566US$19.81
02 Jun 22SellUS$122,403Jacob ShulmanIndividual6,261US$19.55
01 Jun 22SellUS$82,130Tali NotmanIndividual4,201US$19.55

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.6%.


Top Shareholders

Top 25 shareholders own 73.39% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
9.6%
Gemini Israel Funds
9,529,495$183.7m0%68.78%
7.36%
Yoav Landman
7,304,683$140.8m0%no data
5.59%
Frederic Simon
5,555,331$107.1m-1.44%no data
5.44%
Sapphire Ventures, LLC
5,401,449$104.1m-7.84%22.97%
5.17%
Shlomi Haim
5,130,363$98.9m0.37%no data
4.93%
Jeffrey Horing
4,893,378$94.3m3539.17%no data
4.91%
The Vanguard Group, Inc.
4,872,462$93.9m12.14%no data
4.78%
Insight Venture Management, LLC
4,748,122$91.5m0%1.56%
2.4%
Eminence Capital, LP
2,381,965$45.9m0%0.89%
2.21%
Dell Technologies Inc.
2,197,908$42.4m0%no data
2.13%
Spark Capital Partners, LLC
2,115,352$40.8m0%14.39%
1.93%
Point72 Asset Management, L.P.
1,911,971$36.9m8.4%0.1%
1.78%
Optimus Prime Fund Management Co., Ltd
1,767,588$34.1m24.69%3.87%
1.68%
J.P. Morgan Asset Management, Inc.
1,670,624$32.2m27.3%0.01%
1.66%
Baillie Gifford & Co.
1,645,244$31.7m-0.45%0.02%
1.64%
Renaissance Technologies LLC
1,632,800$31.5m103.01%0.04%
1.58%
Citadel Advisors LLC
1,572,573$30.3m-19.36%0.05%
1.28%
Jericho Capital Asset Management L.P.
1,275,000$24.6m0%1.65%
1.26%
TimesSquare Capital Management, LLC
1,251,471$24.1m10.47%0.29%
1.2%
Grandeur Peak Global Advisors, LLC
1,187,204$22.9m-11.74%0.52%
1.07%
Fiera Capital Corporation
1,060,477$20.4m877.81%0.03%
1.01%
Swedbank Robur Fonder AB
1,000,000$19.3m0%0.03%
0.99%
BNPP Asset Management Holding
979,575$18.9m0%0.04%
0.99%
Managed Account Advisors LLC
979,139$18.9m36.11%0.01%
0.83%
Alkeon Capital Management, LLC
820,700$15.8m-1.9%0.13%

Company Information

JFrog Ltd.'s employee growth, exchange listings and data sources


Key Information

  • Name: JFrog Ltd.
  • Ticker: FROG
  • Exchange: NasdaqGS
  • Founded: 2008
  • Industry: Systems Software
  • Sector: Software
  • Implied Market Cap: US$1.915b
  • Shares outstanding: 99.31m
  • Website: https://www.jfrog.com

Number of Employees


Location

  • JFrog Ltd.
  • 270 East Caribbean Drive
  • Sunnyvale
  • California
  • 94089
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FROGNasdaqGS (Nasdaq Global Select)YesOrdinary SharesUSUSDSep 2020

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/24 00:00
End of Day Share Price2022/09/23 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.