JFrog's (FROG) Q4 sales topped expectations, driven by a 37% jump in cloud revenue, while enterprise deals and cloud migration trends will bolster H2, Morgan Stanley said Friday in a report.
The security segment contributed 3% to revenue and 12% to remaining performance obligations by the end of 2024 and growth in the segment positions JFrog as a multiproduct company in the market for development, security and operations, the report said.
JFrog is prioritizing larger enterprise customers, leading to churn among smaller accounts with a loss of 740 lower-dollar subscription customers with a gain of 640 higher-value customers, Morgan Stanley said.
The company expects flat operating margins and decreased cash flow margins in 2025 with 17% revenue growth, the report said.
Morgan Stanley raised its price target on JFrog's stock to $44 from $36 and kept its overweight rating.
JFrog shares rose 5.9% in recent Friday trading.
Price: 39.93, Change: +2.22, Percent Change: +5.89
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.