Our Stock of the Week is JFrog Ltd. (FROG). FROG provides a platform that allows organizations to continuously and securely deliver software updates across any system. This is particularly helpful for model training in developing AI systems. Demand for FROG's services is increasing due to AI development.

On February 14, the company announced earnings of $0.19 versus estimates of $0.12, which grew by 27% over the previous year. Guidance for 2024 increased to $0.58 to  $0.60. The company has consistently beat estimates.

While the stock has a fairly aggressive valuation, it has an average target price of $49.20, close to the high it hit in its last earnings report. Morgan Stanley has a $52 target, and after the last report, the analyst commented: "Cloud accelerated for the second quarter in a row, but this time "much more explosively," which "puts a major dent in the bear case" that JFrog will be left out of the stack as the software release process moves to the cloud.   Following "a clean beat and raise" quarter, the firm thinks FY24 revenue and cloud estimates "could prove conservative" JFrog's enterprise sales motion is driving adoption and leading to numerous net new $1M annual recurring revenue.   

Technically, the stock has been consolidating in a trading range since its strong earnings report. There is support around the $41 level and then the gap area. As always, we will not chase the open on Monday but are looking for moveover resistance at $45. We will trade the stock aggressively as it develops. 

This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell anytime for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing no positions in FROG. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.