Apple is at the heart of software company Jamf’s appeal

Artwork by Michael Glenwood

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When you live by

you die by Apple.

Jamf Holding
investors have learned this the hard way, but its stock looks set to rebound.

The past four months have not been good for Jamf. On November 10, Apple (ticker: AAPL) announced that it would launch Apple Business Essentials, which would provide new device onboarding and cloud management for small businesses. That’s exactly what Jamf (JAMF), which serves businesses and educational institutions, is doing, and its stock has fallen 32% since the announcement.

The sharp decline in the stock appears to be an overreaction. While Apple’s announcement was alarming, there are signs that Apple still views Minneapolis-based Jamf as a partner, not a competitor, and that its new unit won’t affect sales of the device too much. software publisher. Large customers, including


General Electric (GE),
and even Apple itself, seem to stick with Jamf. At around two-thirds of the price it was trading at just a few months ago, the stock now looks like a good rally.

Jamf’s growth certainly looks impressive. On March 1, the $3.9 billion company reported fourth-quarter earnings of two cents per share, beating forecast by a penny, on sales of $103.8 million, ahead of forecast. of $100.3 million. It also recorded total annual recurring revenue of $412.5 million, above Wall Street expectations of $399 million and up 45% from the prior year, with organic annual recurring revenue – which do not include new acquisitions – up about 37%.

Analysts expect annual recurring revenue, or ARR, to grow at a 24% annual rate, to $632 million, over the next two years. This will be primarily due to commercial customers, which management said in its fourth quarter earnings call drove much of the overall year-over-year growth in recurring revenue.

Headquarter Minneapolis
Recent Price $34.26
Change since the beginning of the year -9.90%
Market value (bil) $4.10
2022E sales (millions) $470
2022E net income (mil) $18.40
2022E EPS $0.14
2022E P/E $244.70


Source: FactSet

Needham analyst Josh Reilly sees even more potential ahead. Jamf can sustain an ARR growth rate above 30% over the next few years, it claims, which would bring the 2023 analyst consensus ARR to more than $700 million. “There are a lot of growth opportunities here,” Reilly says.

In the real world, however, Jamf, which went public in July 2020, depends on Apple’s ecosystem for its business, which is why the tech titan’s announcement had such a big impact.

“In the short term, there are a lot of negatives,” says Eric Schiffer, founder of private equity firm Patriarch Organization. “[Apple] comes for them, which I think will reduce the valuation.

Jamf management has tried to downplay competition from Apple, given that the tech giant’s new unit is focused on small businesses. In November, Jamf Chief Financial Officer Jill Putman said the 500-or-less employee segment represents a low single-digit percentage of the company’s total ARR, implying that the overall impact of the decision Apple won’t be too difficult to manage. .

Catering to large customers has other advantages. Companies aren’t about to give up using Apple products, and Jamf is the leading software provider for Apple users. The company has more than 60,000 customers. Competitor Kandji, on the other hand, a private company, just got an $800 million valuation and has just over 1,000 customers, according to a Kandji blog post.

At the same time, Apple doesn’t seem interested in meeting the needs of larger customers, says Gregg Moskowitz, an analyst at Mizuho Securities. Jamf has become very good at delivering the kinds of complex solutions Apple product owners need. Its annual sales more than doubled from 2018 to $366 million in 2021, according to a Securities and Exchange Commission filing.

“All of this takes many years of investment,” Moskowitz said. “We don’t think Apple wants to take a combative approach to Jamf.”

Whether you agree with Moskowitz likely determines whether you think Jamf, which trades at 8.2 times 12-month forward sales, is still too expensive to buy, even after its recent haircut. The company is also dealing with rising interest rates, forcing investors to reassess how much they will pay for growth stocks like Jamf.

Still, Jamf is much cheaper today than it was just before Apple’s announcement, when it traded at 13 times forward sales. It is much more expensive than the


2.5 times, but just below the average US software stock, which trades at just over nine times sales and doesn’t see sales growing as quickly as Jamf.

RBC Capital Markets analyst Matthew Hedberg’s $47 price target implies the stock should trade at an enterprise value of 11 times its 2023 sales estimate, up 42.3 % from Friday’s closing price of $33.02.

“We remain positive on the strategic outlook and the potential for continued growth of over 30% in 2022,” Hedberg wrote. “One could argue for further multiple expansion.”

Or at least a significant rise in the title.

Write to Jacob Sonenshine at

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