Needham maintains Buy on Jamf stock with $25 target

Tuesday

Needham has reiterated its Buy rating and $25.00 price target for Jamf Holding Corp. (NASDAQ:JAMF) shares following the company’s recent acquisition announcement. Jamf, currently valued at $1.78 billion, disclosed its plans to purchase Identity Automation (IA) for $215 million in cash, a transaction expected to be finalized in Q2/25. IA primarily serves the education sector and, to a lesser extent, the healthcare industry. The acquisition is seen as a strategic move for Jamf to broaden IA’s reach into additional markets such as retail, transportation, logistics, and travel. With a robust gross profit margin of 79.58%, Jamf demonstrates strong operational efficiency to support this expansion.

On Monday, Jamf shared its intention to leverage IA’s technology across various industries that require dynamic identity solutions. The company aims to initially concentrate on the education market, where it can cross-sell to its extensive base of over 40,000 education clients, most of which are in the K-12 segment. Jamf’s management has indicated that the addition of IA is expected to contribute positively to both revenue growth and operating income, looking at both trailing twelve months (TTM) and forward projections.

The strategic acquisition of IA is set to enhance Jamf’s portfolio by allowing the company to control user identity management. This move is anticipated to complement existing offerings like Jamf Connect and Zero Trust Network Access (ZTNA) solutions. The financial details of the deal reveal Jamf’s commitment to expanding its services and catering to the evolving needs of dynamic identity management across various industries.

In other recent news, Jamf Holding Corp. announced mixed financial results for the fourth quarter of 2024, reporting a non-GAAP EPS of $0.17, which exceeded the consensus estimate of $0.15. The company’s total revenue reached approximately $163.0 million, slightly above the consensus of $162.5 million, marking an 8% year-over-year growth. However, this growth rate decelerated from the previous quarter’s 12% increase. In a strategic move, Jamf has agreed to acquire Identity Automation for approximately $215 million, aiming to enhance its cybersecurity offerings. Management expects this acquisition to positively impact revenue and non-GAAP operating income immediately. Analyst firms have adjusted their price targets for Jamf, with JPMorgan reducing it to $18 from $20 while maintaining an Overweight rating, and Mizuho (NYSE:MFG) also setting an $18 target with an Outperform rating. JMP Securities adjusted their price target to $27 from $30, maintaining a Market Outperform rating. Despite the challenges, Jamf remains optimistic about its competitive position and future prospects.

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