Please ensure Javascript is enabled for purposes of website accessibility

Why JFrog Stock Plummeted Today

By Chris Neiger - Updated May 7, 2021 at 2:01PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Despite revenue and earnings beats, some investors sold their shares.

What happened

Shares of JFrog (FROG -0.04%), a software management company, tumbled today after the company reported its first-quarter earnings yesterday. 

As of 2:34 p.m. EDT on Friday, the tech stock was down by 14.9%.  

So what 

JFrog reported diluted adjusted earnings per share of $0.02 in the quarter, ahead of analysts' consensus earnings estimate of $0.01. The tech company's quarterly revenue of $45.1 million also outpaced Wall Street's estimate of $44.8 million for the quarter. 

A line graph on a purple background.

Image source: Getty Images.

"Our strong first quarter results are setting a solid tone for the year, with 37% revenue growth, 130% net dollar retention rate for the trailing four quarters, and increasing net new customer additions," CEO Shlomi Ben Haim said in a press release.

The company grew its cloud revenue by 62% in the quarter, to $10.3 million. And it increased its percentage of revenue that comes from Frog's Enterprise+ service to 26% of total sales, up from 16% in the year-ago quarter.

But despite the strong quarter and the fact that the company's sales and earnings beat Wall Street's estimates, JFrog's stock plunged today. Investors may have been unhappy with the company's outlook for the second quarter.

Now what 

Management expects second-quarter revenue to be in the range of $47.6 million to $48.6 million, with adjusted earnings estimated to be between zero to $0.01 per share. Investors were likely unimpressed with this outlook. With today's share price drop, JFrog's stock has fallen 43% year to date.


Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

JFrog Ltd. Stock Quote
JFrog Ltd.
$24.18 (-0.04%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.