Stock market today: S&P 500 drops for fifth day as focus shifts to Powell’s speech
On Friday, TD Cowen exhibited confidence in JFrog (NASDAQ:FROG), lifting the company’s price target from $47.00 to $50.00 while retaining a Buy rating on the stock. The adjustment follows JFrog’s announcement of robust cloud growth and an optimistic financial outlook. According to InvestingPro data, JFrog maintains strong financial health with a current ratio of 2.04, indicating solid liquidity. The stock is currently trading at $36.67, with 13 analysts recently revising their earnings estimates upward.
Sherman of TD Cowen highlighted JFrog’s impressive cloud revenue growth, which at 42% surpassed Wall Street’s expectations of 34%. This surge was attributed to strong consumption that exceeded commitments. The company’s overall revenue growth reached 22.47% in the last twelve months, with an impressive gross profit margin of 77.06%. In light of these results, JFrog has increased its total revenue guidance for fiscal year 2025, nudging it up from 17% to 18%. Additionally, the cloud revenue forecast has been raised by 100 basis points, which Sherman believes to be a conservative estimate.
The analyst also expressed enthusiasm over JFrog’s significant agreement with a major AI company, which is anticipated to contribute positively to the company’s performance. Furthermore, Sherman pointed out that JFrog’s security pipelines are robust and are expected to continue gaining traction throughout the year.
Sherman’s analysis of JFrog’s financials suggests that the company’s current valuations are appealing. With an enterprise value (EV) to calendar year 2026 estimated sales multiple of approximately 6x and an EV to free cash flow (FCF) multiple of 25x, the valuation appears attractive in the eyes of TD Cowen. These metrics contribute to the firm’s positive outlook on JFrog’s stock, as reflected in the revised price target. InvestingPro analysis shows analyst targets ranging from $36 to $48, with a strong consensus recommendation of 1.55 (where 1 is Strong Buy). Get access to JFrog’s comprehensive Pro Research Report and 8 additional ProTips with an InvestingPro subscription.
In other recent news, JFrog has reported impressive financial results for the first quarter of 2025, surpassing analysts’ expectations. The company achieved earnings per share of $0.20, exceeding the forecasted $0.15, and reported revenue of $122.4 million, which was higher than the anticipated $117.39 million. This strong performance was driven by a 22% year-over-year revenue increase, with significant contributions from the cloud segment, which grew by 42%. Additionally, DA Davidson raised its price target for JFrog’s stock from $40 to $45, maintaining a Buy rating, citing robust cloud usage and increased demand for security products as key factors.
JFrog’s cautious outlook for the future reflects potential macroeconomic uncertainties, although the company continues to see expansion in its business pipeline. The firm has also been actively expanding its product offerings and partnerships in the machine learning and artificial intelligence space. JFrog’s recent integration with Hugging Face and GitHub further supports its growth strategy. The company is set to participate in DA Davidson’s Technology Conference, presenting an opportunity to showcase its business strategies and offerings to a wider audience.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.