At US$28.61, Is JFrog Ltd. (NASDAQ:FROG) Worth Looking At Closely?

While JFrog Ltd. (NASDAQ:FROG) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. While good news for shareholders, the company has traded much higher in the past year. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine JFrog’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for JFrog

What Is JFrog Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 7.6% below our intrinsic value, which means if you buy JFrog today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $30.96, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, JFrog’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will JFrog generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of JFrog, it is expected to deliver a negative earnings growth of -9.8%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Currently, FROG appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on FROG for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on FROG should the price fluctuate below its true value.

If you want to dive deeper into JFrog, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 4 warning signs for JFrog (of which 1 is a bit concerning!) you should know about.

If you are no longer interested in JFrog, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.