Spotting Winners: JFrog (NASDAQ:FROG) And Software Development Stocks In Q4
Earnings results often give us a good indication of what direction a company will take in the months ahead. With Q4 now behind us, let’s have a look at JFrog (NASDAQ:FROG) and its peers.
As legendary VC investor Marc Andreessen says, "Software is eating the world", and it touches virtually every industry. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming.
The 11 software development stocks we track reported a mixed Q4; on average, revenues beat analyst consensus estimates by 3% while next quarter's revenue guidance was 0.8% above consensus. Valuation multiples for growth stocks have reverted to their historical means after reaching highs in early 2021, but software development stocks held their ground better than others, with the share prices up 0.2% on average since the previous earnings results.
JFrog (NASDAQ:FROG)
Named after the founders' affinity for frogs, JFrog (NASDAQ:FROG) provides a software-as-a-service platform that makes developing and releasing software easier and faster, especially for large teams.
JFrog reported revenues of $97.26 million, up 27.1% year on year, topping analyst expectations by 4.7%. It was a solid quarter for the company, with an impressive beat of analysts' billings and revenue estimates.
“Our 2023 performance showcases JFrog’s solid execution across our strategic pillars; driving growth in the cloud, leveraging complete software supply chain capabilities, and enhancing our security offerings - all supported by our focused transition to enterprise sales while building an efficient business,” stated Shlomi Ben Haim, JFrog CEO and Co-founder.
The stock is up 19% since the results and currently trades at $44.18.
We think JFrog is a good business, but is it a buy today? Read our full report here, it's free.
Best Q4: Bandwidth (NASDAQ:BAND)
Started in 1999 by David Morken who was later joined by Henry Kaestner as co-founder in 2001, Bandwidth (NASDAQ:BAND) provides thousands of customers with a software platform that uses its own global network to provide phone numbers, voice, and text connectivity.
Bandwidth reported revenues of $165.4 million, up 5.4% year on year, outperforming analyst expectations by 7.4%. It was an exceptional quarter for the company, with optimistic revenue guidance for the next quarter.
Bandwidth pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is up 45.9% since the results and currently trades at $17.75.
Is now the time to buy Bandwidth? Access our full analysis of the earnings results here, it's free.
Weakest Q4: Akamai (NASDAQ:AKAM)
Founded in 1999 by two engineers from MIT, Akamai (NASDAQ:AKAM) provides software for organizations to efficiently deliver web content to their customers.
Akamai reported revenues of $995 million, up 7.2% year on year, falling short of analyst expectations by 0.5%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.
Akamai had the weakest performance against analyst estimates in the group. The stock is down 13.3% since the results and currently trades at $108.5.
Read our full analysis of Akamai's results here.
GitLab (NASDAQ:GTLB)
Founded as an open-source project in 2011, GitLab (NASDAQ:GTLB) is a leading software development tools platform.
GitLab reported revenues of $163.8 million, up 33.3% year on year, surpassing analyst expectations by 3.5%. It was a mixed quarter for the company, with an impressive beat of analysts' billings estimates but full-year revenue guidance missing analysts' expectations.
GitLab delivered the fastest revenue growth among its peers. The stock is down 20.2% since the results and currently trades at $59.4.
Read our full, actionable report on GitLab here, it's free.
F5 (NASDAQ:FFIV)
Initially started as a hardware appliances company in the late 1990s, F5 (NASDAQ:FFIV) makes software that helps large enterprises ensure their web applications are always available by distributing network traffic and protecting them from cyberattacks.
F5 reported revenues of $692.6 million, down 1.1% year on year, surpassing analyst expectations by 1.1%. It was a very strong quarter for the company, with an impressive beat of analysts' billings estimates and strong sales guidance for the next quarter.
F5 had the slowest revenue growth among its peers. The stock is up 0.8% since the results and currently trades at $186.87.
Read our full, actionable report on F5 here, it's free.
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