Critical Review: JFrog (NASDAQ:FROG) and Check Point Software Technologies (NASDAQ:CHKP)

JFrog (NASDAQ:FROG) and Check Point Software Technologies (NASDAQ:CHKP) are both large-cap technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for JFrog and Check Point Software Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JFrog	1	1	21	0	2.87
Check Point Software Technologies	0	19	8	0	2.30

JFrog currently has a consensus price target of $109.71, suggesting a potential upside of 30.13%. Check Point Software Technologies has a consensus price target of $149.48, suggesting a potential upside of 8.42%. Given JFrog’s stronger consensus rating and higher possible upside, equities research analysts clearly believe JFrog is more favorable than Check Point Software Technologies.

Valuation and Earnings

This table compares JFrog and Check Point Software Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JFrog	$531.84 million	19.55	-$71.82 million	($0.37)	-227.86
Check Point Software Technologies	$2.73 billion	5.16	$1.06 billion	$9.77	14.11

Check Point Software Technologies has higher revenue and earnings than JFrog. JFrog is trading at a lower price-to-earnings ratio than Check Point Software Technologies, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

JFrog has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Check Point Software Technologies has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500.

Insider & Institutional Ownership

85.0% of JFrog shares are owned by institutional investors. Comparatively, 98.5% of Check Point Software Technologies shares are owned by institutional investors. 11.8% of JFrog shares are owned by insiders. Comparatively, 29.0% of Check Point Software Technologies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares JFrog and Check Point Software Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JFrog	-7.35%	-2.71%	-1.80%
Check Point Software Technologies	37.93%	38.80%	15.60%

Summary

Check Point Software Technologies beats JFrog on 9 of the 14 factors compared between the two stocks.

About JFrog

JFrog Ltd. provides end-to-end hybrid software supply chain platform in the United States, Israel, India, and internationally. The company offers JFrog Artifactory, a package repository that allows teams and organizations to store, update, and manage their software packages; JFrog Curation that functions as a guardian outside the software development pipeline, controlling the admission of packages into an organization, primarily from open source or public repositories; JFrog Xray, which scans JFrog Artifactory to secure all software packages; JFrog Advanced Security, an optional add-on for select JFrog subscriptions; and JFrog Distribution that provides software package distribution. It also provides JFrog Artifactory Edge that utilizes and leverages metadata from JFrog Artifactory to facilitate the transfer of the incremental changes in software packages from their previous versions; JFrog Mission Control, a platform control panel that provides a view of moving pieces of an organization’s software supply chain workflow; JFrog Insight, a DevOps intelligence tool; JFrog Connect, a device management solution that allows companies to manage software updates and monitor performance in IoT device fleets; and JFrog Pipelines, a continuous integration and delivery tool for automating and orchestrating the movement of software packages. In addition, the company provides JFrog Pro that provides access to the universal version of JFrog Artifactory and ongoing updates, upgrades, and bug fixes; JFrog Pro X, a self-hosted-only subscription; JFrog Enterprise X, which offers cluster configuration, federated repositories, multi-region replication, larger enterprise-scale deployments, service-level agreement support, and deeper security; and JFrog Enterprise Plus, a full platform subscription option. It serves technology, financial services, retail, healthcare, and telecommunications organizations. JFrog Ltd. was incorporated in 2008 and is headquartered in Sunnyvale, California.

About Check Point Software Technologies

Check Point Software Technologies Ltd. develops, markets, and supports a range of products and services for IT security worldwide. The company offers a multilevel security architecture, cloud, network, mobile devices, endpoints information, and IOT solutions. It provides Check Point Infinity Architecture, a cyber security architecture that protects against fifth generation cyber-attacks across various networks, endpoint, cloud, workloads, Internet of Things, and mobile. In addition, the company offers security gateways and software platforms that support small and medium sized business. Further, it provides cloud network security, cloud native application protection, security and posture management, cloud identity and entitlement, cloud workload protection, cloud detection and response, and cloud web application protection for web applications and APIs; and Check Point Harmony that delivers endpoint and secure connectivity for remote user access. Additionally, the company offers technical customer support programs and plans; professional services in implementing, upgrading, and optimizing Check Point products comprising design planning and security implementation; and certification and educational training services on Check Point products. It sells its products through distributors, resellers, system integrators, original equipment manufacturers, and managed security service providers. Check Point Software Technologies Ltd. was incorporated in 1993 and is headquartered in Tel Aviv, Israel.