Is It Too Late To Consider Buying JFrog Ltd. (NASDAQ:FROG)?

JFrog Ltd. (NASDAQ:FROG), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$42.03 and falling to the lows of US$28.49. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether JFrog's current trading price of US$28.49 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at JFrog’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What Is JFrog Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 3.3% below our intrinsic value, which means if you buy JFrog today, you’d be paying a fair price for it. And if you believe that the stock is really worth $29.45, then there’s not much of an upside to gain from mispricing. What's more, JFrog’s share price may be more stable over time (relative to the market), as indicated by its low beta.

See our latest analysis for JFrog

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. With profit expected to grow by 100% over the next couple of years, the future seems bright for JFrog. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in FROG’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on FROG, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, we've found that JFrog has 3 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

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.