Opinions
Jim Cramer - Mad Money
JFrog Ltd.
FROG-Q
BUY ON WEAKNESS
Sep 16, 2020
$64.790
Stock price when the opinion was issued
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COMMENT
What he calls one of 15 Red Hot stocks: unstoppable growth stocks with a sky-high valuation (30-100x sales, not earnings)
Thank of them as a software developer software developer. Recently it went public. The stock has tripled YTD, because it's a textbook Covid play. The bar is set pretty high, priced at 44x next year's sales.
Technology
DON'T BUY
They didn't blow away their numbers. You have to when expectations are so high (this is a speculative stock). Even Adobe blew away numbers last night, but sold off today.
Technology
IPO'd today. Likes it. It was priced at $44, opened at $71, pulled back to $51 and closed at $64.79. FROG is a cloud platform for development operations (dev ops) which means it allows engineers to collaborate between departments within a company. They bridge between the development and operation teams. FROG customers include Facebook, Spotify, Google, Netflix, Cisco, Oracle and Dell. It boasted 65% revenue growth in 2019 and 50% the first half of this year, based on recurring subscription revenue for its services. First half this year came within $500K to break even, so debt is lowering. He expects them to be profitable in 2021. Has a lot going for it, but its valuation is already at nosebleed levels. A great stock, but too high already.