JFrog stock price target raised to $50 from $40 at Raymond James on security growth

Investing.com - Raymond (NSE:RYMD) James has raised its price target on JFrog (NASDAQ:FROG) to $50.00 from $40.00 while maintaining an Outperform rating on the software company’s shares. The company, currently valued at $5 billion, maintains impressive gross profit margins of 76% and has demonstrated strong revenue growth of 22% over the last twelve months.

The investment firm cited JFrog’s expanding cybersecurity business as a key factor for the higher valuation, noting this segment would likely drive multiple expansion for the stock, which has already appreciated approximately 50% year-to-date compared to the IGV index’s 10% gain. According to InvestingPro’s analysis, the stock is trading near its 52-week high of $45.10, with current price levels aligned with its Fair Value estimate.

Raymond James kept its financial estimates unchanged, taking what it described as a "conservative approach" to JFrog’s security opportunity, which it characterized as being at the "tadpole stage" of development. InvestingPro analysis reveals 12 additional key insights about FROG’s financial health and growth prospects, available in the comprehensive Pro Research Report.

The firm expects more customers to adopt JFrog’s security products in the future, which should increase customer lifetime value and contribute to the company’s overall growth trajectory.

As security becomes a larger portion of JFrog’s business mix, Raymond James anticipates this will positively impact both the company’s growth rate and its valuation multiple going forward.

In other recent news, JFrog Ltd. reported impressive first-quarter 2025 earnings, surpassing forecasts with an earnings per share (EPS) of $0.20 against the expected $0.15, and revenue reaching $122.4 million, exceeding the anticipated $117.39 million. The company’s cloud segment demonstrated significant growth, contributing 42% year-over-year, a key driver behind the 22% increase in total revenue. Analysts from Stifel maintained a Buy rating for JFrog, highlighting the robust cloud performance as a major factor, while TD Cowen raised the company’s price target to $50, citing impressive cloud revenue growth of 42%, which exceeded Wall Street’s expectations. DA Davidson also expressed optimism by increasing their price target to $45, noting JFrog’s strong enterprise engagement and demand for security products. The company announced a significant contract with a leading AI firm, further cementing its influence in the tech industry. Additionally, JFrog appointed Sunny Rao as Senior Vice President of Asia Pacific sales, aiming to expand its market presence in the region. Despite these positive outcomes, JFrog’s management remains cautious, projecting a conservative full-year 2025 guidance due to macroeconomic uncertainties.

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