JFrog Stock To $27?

JFrog (FROG) stock has fallen 25% during the past day, and is currently trading at $37.75. Our multi-factor assessment suggests that it may be time to reduce exposure to FROG stock. We are primarily concerned current valuation and a price of $27 may not be out of reach. We believe there are only a couple of things to fear in FROG stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $4.5 Bil in market cap, JFrog provides a DevOps platform offering scalable package repository solutions with continuous updates, upgrades, and bug fixes for efficient software package management.

[1] Valuation Looks Very High

This table highlights how FROG is valued vs broader market. For more details see: FROG Valuation Ratios

[2] Growth Is Very Strong

• JFrog has seen its top line grow at an average rate of 23.8% over the last 3 years
• Its revenues have grown 24% from $428 Mil to $532 Mil in the last 12 months
• Also, its quarterly revenues grew 25.2% to $145 Mil in the most recent quarter from $116 Mil a year ago.

This table highlights how FROG is growing vs broader market. For more details see: FROG Revenue Comparison

[3] Profitability Appears Very Weak

• FROG last 12 month operating income was $-89 Mil representing operating margin of -16.7%
• With cash flow margin of 27.4%, it generated nearly $146 Mil in operating cash flow over this period
• For the same period, FROG generated nearly $-72 Mil in net income, suggesting net margin of about -13.5%

This table highlights how FROG profitability vs broader market. For more details see: FROG Operating Income Comparison

[4] Financial Stability Looks Very Strong

• FROG Debt was $12 Mil at the end of the most recent quarter, while its current Market Cap is $4.5 Bil. This implies Debt-to-Equity Ratio of 0.3%
• FROG Cash (including cash equivalents) makes up $704 Mil of $1.3 Bil in total Assets. This yields a Cash-to-Assets Ratio of 52.5%

[5] Downturn Resilience Is Very Weak

FROG has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• FROG stock fell 75.8% from a high of $69.93 on 27 January 2021 to $16.94 on 11 May 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $68.98 on 14 December 2025 , and currently trades at $37.75

 
2020 Covid Pandemic

• FROG stock fell 31.0% from a high of $86.35 on 28 September 2020 to $59.60 on 10 November 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read FROG Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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