JFrog Stock Is Ready To Leap
2022.06.03 15:55
Software development applications platform Jfrog (NASDAQ:FROG) stock has been pummeled falling over (-70%) off its post-IPO highs in the technology bear market. DevOps platforms can speed up software development times from months to hours and enable continuous software releases. It optimizes and standardizes technology, and unifies them on a single platform to allow for delivery in one place that is deployable across any production environment. The Company grew its $1 million customers by 60% in the first quarter of fiscal 2022 and partnered with Amazon AWS (NASDAQ:AMZN) to accelerate cloud DevOps processes for their gaming initiatives. Cloud revenues grew 63% in the quarter. JFrog is benefiting from the tailwinds of companies migrating to a one-stop end-to-end solution on a single integrated platform, which driving higher consumption from its clients. Its security solution is setting a new standard in the market. Prudent investors seeking exposure in the DevOps segment can look for opportunistic pullback levels in shares of JFrog.
Q1 Fiscal 2022 Earnings Release
On May 9, 2022, JFrog released its fiscal first-quarter 2022 results for the quarter ending March 2022. The Company reported adjusted earnings-per-share (EPS) of breakeven excluding non-recurring items meeting consensus analyst estimates for breakeven. Revenues grew 41.3% year-over-year (YoY) to $63.7 million beating consensus analyst expectations of $61.15 million. Customers with $100K annual run rate (ARR) increased by 52% YoY to 599. Customers with $1 million ARR grew by 60% YoY to 16. JFrog CEO Shlomi Ben Haim commented:
“JFrog demonstrated a solid start to 2022, as Q1 was yet another strong quarter. We’re excited to see the growing number of customers transitioning to the cloud, securing their software supply chain, and powering their DevOps pipelines with the JFrog Platform. Our consistent investment in an end-to-end DevOps platform, that includes advanced security and distribution capabilities, answers the market demand. Our focus on multi-cloud, hybrid, and self-hosted offerings continues to bear fruit.”
Mixed Guidance
JFrog provided guidance for fiscal Q2 2022 EPS between (-$0.04) to (-$0.03) verses (-$0.01) on revenues between $65 million to $66 million versus $64.76 million. The Company sees fiscal full-year 2022 revenues to come in between $276.5 million to $278.5 million versus $273.33 million consensus analyst estimates.
Conference Call Takeaways
CEO Haim noted that fiscal Q1 2022 started the year off with the highest quarterly revenues in the past six quarters. This was a direct result of implementing key strategies with focus on a cloud-first end-to-end platform approach. Cloud revenues grew 63% in the quarter. He noted the trend of more companies migrating to a one-stop solution from binary storage, security, and distribution capabilities on its integrated platform. The Company employed four key strategies including enabling a hybrid environment by investing in hybrid and multi-cloud offerings, setting a new security solution standard, 360 funnel management, and providing an end-to-end solution that enables full binary life cycle control. The combined offering of JFrog Artifactory and Xray protects its clients from Spring Shell vulnerabilities like Log4j. It enables clients to find, fix, replace and test incidents in hours rather than weeks to months. He detailed how JFrog helped Fidelity with its transition to the cloud migrating thousands of applications in a hybrid and multi-cloud environment. He also pointed out how JFrog continues to be mission-critical not just for development teams but the entire business like Broadcom (NASDAQ:AVGO), “…supporting 23-plus business units such as, CA Technologies and Symantec (NASDAQ:NLOK) covering not only thousands of developers, but also extensive M&A activities and standardization, supporting about 6,800 deployments per day.”
JFrog Ltd., Stock Chart
FROG Opportunistic Price Levels
Using the rifle charts on the weekly and daily frames provides a precision view of the landscape for FROG stock. The weekly rifle chart formed an inverse pup breakdown through $23.98 and put in a bottom off the $16.43 Fibonacci (fib) level. The weekly 5-period moving average (MA) resistance is testing at $19.69 followed by the 15-period MA at $22.73. The weekly market structure low (MSL) buy signal triggers on a breakout above the $20.26 level. The weekly lower Bollinger Bands (BBs) sit at $17.06 and weekly 50-period MA resistance sits at $31.70. The daily rifle chart is attempting to breakout above the daily 5-period MA at $18.55 as the stochastic tries to drive a mini pup higher. The daily 50-period MA resistance sits at $22.42 and daily upper BBs sit at $23.01. Prudent investors can watch for opportunistic pullback levels at the $17.98 fib, $16.43 fib, $15.54, $14.23 fib, $12.58, and the $10.50 fib level. Upside trajectories range from the $25.03 fib level up towards the $34.62 fib level.
