There were no S&P 500 earnings reactions on Friday, but we want to tell you about one of our favorite software names in the market.
Every now and then, a stock shows up on our radar that forces us to stop what we're doing and take a closer look.
Not because the industry is strong, but because the company itself is so relentlessly executing that it simply refuses to behave like its peers.
The name that has our attention is JFrog $FROG.
It's a $7B software company that sits at the heart of modern DevOps. Their platform, the so-called "Liquid Software" vision, helps enterprises automate, secure, and manage the entire lifecycle of their software releases.
If you're a company pushing code into production, there's a good chance JFrog is somewhere in that pipeline, making sure nothing breaks.
And while most software names are stuck in neutral or flat-out lagging, the stock is ignoring that weakness.
For example, in Sunday's Weekly Beat column, we wrote about Salesforce $CRM, which is expected to report earnings after Wednesday's closing bell. This is one of the largest software stocks in the world, and it looks woeful.
After the closing bell on November 6th, FROG reported its 14th consecutive top- and bottom-line beat.
And this quarter's earnings reaction was special...
The stock exploded nearly 27% the next day, marking its second-best earnings reaction ever. That doesn't happen to companies with questionable fundamentals. It happens when Wall Street is re-rating a business because the numbers keep coming in better than expected.
JFrog is doing something rare in this environment: it's flawlessly executing.
Before we even look at the stock, we need to understand why investors like this business.
It all starts with annual recurring revenue, the lifeblood of any subscription software company:
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