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On Friday, Needham raised its price target for JFrog (NASDAQ:FROG) shares to $46 from the previous target of $39, while reiterating a Buy rating on the stock. Currently trading at $39.75, InvestingPro analysis suggests the stock is fairly valued. The revision follows JFrog's recent quarterly financial results, which exceeded the company's own guidance and analyst expectations.
Needham's analysts highlighted that despite initial concerns about JFrog's full-year guidance potentially falling short of consensus estimates, the company reported strong performance indicators. These metrics include a 22% year-over-year increase in Billings and a 55% rise in Remaining Performance Obligations (RPO). InvestingPro data reveals impressive gross profit margins of 77.06% and robust revenue growth of 22.47% over the last twelve months.
JFrog's guidance for the calendar year 2025 anticipates revenue growth of 16%-17% year-over-year, which is deemed conservative compared to previous years. However, this forecast still surpasses the midpoint of sell-side projections. Needham believes that although some may scrutinize the $1.3 million Database contribution in the fourth quarter of the calendar year 2024 or the Total (EPA:TTEF) Customer Count, these factors are minor in the broader context of JFrog's performance.
The firm's analysis suggests that JFrog's solid quarterly results, coupled with a "beatable" guide for the upcoming year, justify the increased confidence in the stock. As JFrog continues to demonstrate robust growth, particularly in Cloud Revenue with approximately 40% year-over-year growth in the calendar year 2024, Needham's updated price target reflects an optimistic outlook for the company's financial trajectory. InvestingPro data supports this positive outlook, showing a "GOOD" overall financial health score, with analysts expecting profitability this year. Discover 10+ additional exclusive insights about JFrog with an InvestingPro subscription.
In other recent news, JFrog has been making notable strides, with significant events centered around earnings and revenue results, along with analyst upgrades. The company's fourth quarter of 2024 results outperformed the FactSet consensus in several key areas, including revenue, earnings per share, and free cash flow. These strong financials were driven by gains in JFrog's cloud services and Enterprise+ offerings, as well as an increase in deal sizes.
Cantor Fitzgerald analysts have expressed their confidence in JFrog's financial performance by raising the company's price target from $38.00 to $46.00 while maintaining an Overweight rating on the stock. This decision followed JFrog's impressive financial results and the company's financial guidance for fiscal year 2025, which forecasts a 17% growth in both top-line revenue and operating income.
Furthermore, JFrog's Q4 earnings and revenue surpassed estimates, with an adjusted earnings per share of $0.19 and revenue of $116.1 million. The company's cloud revenue, a key growth driver, surged 37% YoY to $49.4 million in Q4, and the number of clients generating over $1 million in annual recurring revenue rose 41% YoY to 52.
Looking ahead, JFrog has provided a robust outlook for Q1 and full-year 2025, with revenue expectations between $116-118 million for Q1 and $499-503 million for the full year. These recent developments point to a strong financial trajectory for JFrog.
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