Cantor Fitzgerald maintained its Overweight recommendation and a $80 price target on JFrog Ltd (NASDAQ:FROG) after the company’s shares tumbled sharply last week.
The decline followed Anthropic’s announcement of Claude Code Security, a tool designed to scan codebases for vulnerabilities and suggest patches. JFrog shares fell 25% on Friday, February 20 - the same day the S&P 500 rose by roughly 1%.
In its analysis, Cantor Fitzgerald described JFrog’s product set as an end-to-end software supply chain control plane that spans artifacts and binaries. The firm highlighted repository-native controls, policy enforcement, SBOM governance and runtime context as core elements of JFrog’s platform. Cantor pointed to the company’s 77% gross profit margin as evidence of the platform’s strong economics.
While Cantor acknowledged that Claude Code Security appears positioned to challenge legacy SAST/DAST offerings, the firm argued the new capability does not directly negate JFrog’s role. Cantor said Claude may be used as an upstream integration feed, whereas JFrog would remain the control plane governing what is admitted, what ships, and what runs in production.
The research note also observed that the rout extended beyond companies with direct exposure to code scanning. CrowdStrike (NYSE:CRWD) and Okta (NASDAQ:OKTA) were down 8% and 9% respectively on the same Friday, despite having no exposure to code scanning. Cantor interpreted the selloff of those non-participants as evidence that the market move was driven more by AI-related fear than by concrete competitive disruption to fundamentals.
Cantor Fitzgerald kept its 12-month price target at $80. According to InvestingPro, the stock looks undervalued on a Fair Value basis at current levels, with analyst price targets ranging from $52 to $80.
Recent company results provided additional context for the analyst debate. JFrog reported fourth-quarter fiscal 2025 earnings that beat estimates, delivering adjusted earnings per share of $0.22 versus a consensus $0.19. Revenue for the quarter came in at $145.3 million, above the $138.09 million forecast.
Across other brokerages, sentiment varied. Truist Securities reiterated a Buy rating and kept a $70 price target, citing a strong fiscal 2025 finish driven by cloud revenue and enterprise sales momentum. TD Cowen raised its price target to $80 from $75, citing cloud growth of 42% that exceeded an expected 32% pace. Stifel, however, lowered its price target to $52 from $64, explicitly flagging AI security concerns after Anthropic’s announcement while retaining a Buy rating. TD Cowen also reiterated its Buy rating and $80 target, describing the market’s immediate reaction to Claude Code Security as overblown.
The mix of analyst responses underscores a split view: some firms emphasize JFrog’s accelerating cloud and security growth, while others express caution over the potential implications of new AI-driven code-scanning tools. For now, Cantor Fitzgerald’s stance is that JFrog’s control-plane positioning and high margins justify maintaining an Overweight rating and an $80 target.
Key points
- Cantor Fitzgerald reaffirmed an Overweight rating and an $80 12-month price target on JFrog following a 25% one-day share drop after Anthropic announced Claude Code Security.
- JFrog’s platform is characterized as a software supply chain control plane with repository-native controls, policy enforcement, SBOM governance and runtime context, and the company reported a 77% gross margin.
- Analyst reactions are mixed: some firms raised or maintained targets on strong cloud growth and fiscal 2025 results, while others trimmed targets citing AI security concerns.
Risks and uncertainties
- Emergence of new AI-driven code-scanning tools like Claude Code Security could change competitive dynamics for security tooling and potentially affect valuations in the software and security sectors.
- Market selloffs driven by AI-related sentiment rather than fundamentals can broaden price pressure to companies without direct exposure, as seen with CrowdStrike and Okta.
- Analyst divergence on valuation and competitive impact creates uncertainty for investors assessing near-term price targets and upside.