JFrog Ltd.

JFrog Ltd. (NASDAQ: FROG) offers an end-to-end, hybrid, universal DevOps platform. FROG's Continuous Software Release Management (CSRM) platform enables organizations to deliver software updates across any system continuously. It derives its revenue through self-managed subscriptions, which comprises licenses, support, and upgrades and updates as they become available.

Key Highlights

• The company reported YoY growth of 38.76% in net revenue to USD 59.24 million in Q4FY21 (ended December 31, 2021) compared to USD 42.69 million in Q4FY20.
• FROG net loss increased to USD 22.70 million in Q4FY21 vs. USD 3.71 million in Q4FY20.
• As of December 31, 2021, the company had cash and cash equivalents (including short-term investments) of USD 421.13 million and no outstanding debt.
• Its ROE was -3.5% in Q4FY21, whereas the industry median stood at -1.6%.
• Relatively high liquidity, current ratio of 2.85x in Q4FY21 vs. industry median of 1.86x.
• FROG announced a new partnership with Softline India, Ltd., a global provider of IT solutions and services, on March 24, 2022, to help companies in India deliver software updates from distributed development environments to the edge seamlessly and securely.
• Stock is currently trading between its crucial short-term (50-day) and long-term (200-day) SMA support levels.
• The stock is leaning towards the lower end of its 52-week range of USD 21.06 to USD 54.05.

Conclusion: Considering the company’s growth in topline, no visibility into profitability, technical indicators, and associated risks. We recommend a "Watch" rating on the stock at the current price of USD 24.95, down 1.46%, as of April 07, 2022, at 11:30 AM PDT.

Technical Price Chart (as on April 07, 2022, at 11:30 AM PDT). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

*Current price as of April 07, 2022, at 11:30 AM PDT

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.