TD Cowen has reaffirmed a Buy rating on JFrog Ltd and held to an $80 price target after a sharp market selloff tied to competitive developments in the code security space. The stock fell 27% over the past week to $36.15, a move that data from InvestingPro shows has pushed the relative strength index into oversold territory.
Analyst Andrew Sherman told investors the market’s reaction to the launch of Claude Code Security appears to be out of proportion with the risk to JFrog’s core business. TD Cowen highlighted that source code scanning comprises only a small portion of JFrog’s total offering and that the segment is already contested by numerous competitors.
Instead of source code scanning, the firm emphasized JFrog’s differentiation around binary security. TD Cowen pointed to the company’s Advanced Security and Curation products as areas where JFrog has shown strong traction. The analyst note calls out that three of the top five AI-native companies are customers, a customer mix that the firm sees as supporting the company’s competitive position.
Margins are also a factor in TD Cowen’s assessment. JFrog’s gross profit margin stands at 77%, a level the firm says underscores the economics of the company’s product set. TD Cowen framed the broader industry trend as one of increasing volume of binaries being created – a development that it believes strengthens the case for a binary-focused security strategy rather than a primary emphasis on source code scanning.
Despite the market’s negative reaction to Anthropic’s announcement about Claude Code Security, TD Cowen maintained its constructive view. The firm not only kept the Buy rating but also adjusted its price target upward to $80 from $75, citing cloud growth of 42% that outpaced consensus expectations of 32%.
Other sell-side coverage remains mixed but generally acknowledges JFrog’s recent operational performance. Truist Securities reiterated a Buy rating, pointing to a robust fiscal 2025 finish driven by cloud revenue, security contributions, and improving enterprise sales momentum. By contrast, Stifel trimmed its price target to $52 from $64 while still maintaining a Buy recommendation, citing concerns arising from the Anthropic announcement.
Financial results provide context for these analyst views. JFrog reported fourth-quarter 2025 earnings per share of $0.22 versus an expected $0.19, and revenue of $145.3 million compared with a consensus projection of $138.09 million. TD Cowen and other analysts referenced these beats along with the company’s above-expectation cloud growth as validation for their favorable stances.
TD Cowen also noted JFrog’s positioning in security around binaries and the continuing industry trend of growing binary volumes as central to its thesis. InvestingPro analysis that accompanies coverage of the company indicates the stock may be undervalued at current levels and highlights JFrog in a Pro Research Report among the 1,400-plus U.S. equities covered with dedicated analyst work.
Overall, the analyst community shows varying perspectives on how competitive developments will affect JFrog’s trajectory, but several firms continue to emphasize the company’s cloud momentum, product traction in binary security, and solid margin profile as reasons to retain a positive view.