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On Friday, Stifel analysts reiterated their Buy rating on JFrog stock (NASDAQ:FROG), maintaining a price target of $45.00. According to InvestingPro data, the software company, currently valued at $4.39 billion, trades near $38.48, with analyst targets ranging from $36 to $48. The firm’s analysts highlighted JFrog’s impressive first-quarter results, which surpassed expectations in both revenue and earnings, propelled by robust cloud performance. The company maintains impressive gross profit margins of 77% and has demonstrated strong revenue growth of 22.5% over the last twelve months. This performance was notably driven by customers using more services than their initial commitments, a trend that JFrog had not significantly experienced since the fiscal year 2023, and never in a first quarter.
JFrog also announced the signing of a substantial E+ contract with a leading genAI company, which will be integrating JFrog’s solutions as their primary system of record. This partnership underscores JFrog’s expanding influence in the industry.
Despite the positive outcomes in the first quarter, JFrog’s management has conservatively projected their full-year 2025 guidance, choosing not to factor in the continuation of the higher consumption trends observed this quarter. They have also adjusted expectations for the second half’s large deal pipeline to mitigate risk. However, the company did raise its forecast for FY25 cloud growth by 100 basis points, reflecting a confident outlook in that area.
Stifel’s analysis suggests that JFrog is in a strong position to maintain high-teens revenue growth in the forthcoming years. This projection is supported by the increasing contribution of security services and sustained cloud growth, which are fueled by ongoing migration activities and consistent consumption patterns among JFrog’s customer base. InvestingPro analysis shows the company maintains a strong financial health score and holds more cash than debt, positioning it well for future growth. Get access to 8 more exclusive InvestingPro Tips and comprehensive financial analysis through the Pro Research Report.
In other recent news, JFrog has reported impressive financial results for the first quarter of 2025. The company exceeded expectations with earnings per share of $0.20, surpassing the forecasted $0.15, and reported revenue of $122.4 million, which was above the anticipated $117.39 million. This strong performance was driven by a 42% year-over-year growth in the cloud segment, now comprising 43% of total revenue. Following these results, TD Cowen raised JFrog’s stock price target to $50, highlighting the company’s robust cloud growth and optimistic financial outlook. Similarly, DA Davidson increased their price target to $45, citing JFrog’s strong start to the year and growing demand for its security products.
The company’s future guidance remains cautious due to macroeconomic uncertainties, although it has adjusted its total revenue guidance for fiscal year 2025 upwards to 18%. JFrog also announced a significant agreement with a major AI company, expected to positively influence its performance. Additionally, JFrog is set to participate in DA Davidson’s Technology Conference, presenting an opportunity to showcase its offerings. These developments reflect a strategic focus on platform consolidation and cloud migration, positioning JFrog as a key player in the evolving tech landscape.
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