Should You Think About Buying JFrog Ltd. (NASDAQ:FROG) Now?

JFrog Ltd. (NASDAQ:FROG), might not be a large cap stock, but it saw a decent share price growth of 12% on the NASDAQGS over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. 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. However, could the stock still be trading at a relatively cheap price? Let’s take a look at JFrog’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for JFrog

Is JFrog Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 13.33% above our intrinsic value, which means if you buy JFrog today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $26.99, there’s only an insignificant downside when the price falls to its real value. In addition to this, JFrog has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of JFrog look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -3.9% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for JFrog. This certainty tips the risk-return scale towards higher risk.

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 tabs on FROG for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, 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 crystalize 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. You'd be interested to know, that we found 3 warning signs for JFrog and you'll want to know about these.

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.