Jamf Holding Corp: Why This Tech Stock May Be a Better Way to Play Apple

An Intriguing Alternative to Play Apple Inc

Shares of Apple Inc (NASDAQ:AAPL) have moved very little this year, with the stock down by 1.8% and trailing the Nasdaq.

But if you want to play Apple from a different angle, there’s a viable option via Jamf Holding Corp (NASDAQ:JAMF).

Jamf is a builder of software infrastructure that’s focused on Apple’s devices and ecosystem. Using the company’s software, enterprises can manage their Apple ecosystem in an effective manner.

Jamf Holding Corp has been around since 2002, and Jamf stock made its debut on the market in July 2020, trading as high as $51.0 shortly after its listing.

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At its current price, the stock is down by 39% from its high and is worth a look.

Jamf Stock Could Take Off From Here

The below chart shows Jamf stock moving lower in a declining trendline from its initial public offering (IPO) price to its breakout in January.

The stock failed to hold the move and has retrenched below its 50-day and 200-day moving averages, including going into a bearish death cross pattern.

If its relative strength rises, Jamf stock could stage another rally toward $40.00. The downside risk is $28.00 to $30.00, which would be good entry points.

Chart courtesy of StockCharts.com

Strong Revenue Growth From Jamf Holding Corp

Jamf has a limited financial history, but based on what we’ve seen so far, the company’s prospects are good.

A look at its revenue picture shows Jamf Holding Corp reporting two consecutive years of double-digit growth, to a record $269.5 million in 2020.

Fiscal YearRevenues (Millions)Growth
2018$146.6N/A
2019$204.039.2%
2020$269.532.0%

(Source: “Jamf Holding Corp.,” MarketWatch, last accessed June 18, 2021.)

Analysts estimate that Jamf’s revenue growth will continue at 25.8% to $338.9 million this year and at 20.4% to $407.9 million in 2022. (Source: “Jamf Holding Corp. (JAMF),” Yahoo! Finance, last accessed June 18, 2021.)

The company’s revenue growth rate appears to be normalizing, but it’s still impressive and will likely pick up, given the dominance of Apple devices in U.S. enterprises.

At the same time, Jamf Holding Corp has delivered earnings before interest, taxes, depreciation, and amortization (EBITDA) income in all three of its reported years, to a record $23.7 million in 2020.

Fiscal YearEBITDA (Millions)Growth
2018$4.1N/A
2019$17.9339.9%
2020$23.732.4%

(Source: MarketWatch, op. cit.)

And while its generally accepted accounting principles (GAAP) earnings-per-share (EPS) profits have been absent, Jamf has been reporting adjusted profits.

Fiscal YearGAAP Diluted EPSGrowth
2018-$0.31N/A
2019-$0.2810.0%
2020-$0.2125.0%

(Source: MarketWatch, op. cit.)

Jamf Holding Corp earned an adjusted $0.14 per diluted share in 2020 and is expected to ratchet this up to $0.24 per diluted share in 2021 and $0.32 in 2022. (Source: Yahoo! Finance, op. cit.)

The company has also produced positive free cash flow in all three of its reported years, including a massive $47.1 million in 2020.

Fiscal YearFree Cash Flow (Millions)Growth
2018$6.5N/A
2019$4.0-38.1%
2020$47.11,080%

(Source: MarketWatch, op. cit.)

As far as the company’s financial risk goes, there are no issues. Jamf holds $28.1 million in debt but has a healthy $196.2 million in cash. (Source: Yahoo! Finance, op. cit.)

Analyst Take

The majority stake in Jamf stock is held by Vista Equity Partners Management, LLC, which has spun the stock out but continues to hold 62% of the outstanding shares. About 180 institutions hold a 96% stake in the outstanding shares. (Source: Yahoo! Finance, op. cit.)

In terms of its valuation, Jamf Holding Corp trades at a hefty 9.1 times its consensus 2022 revenue estimate, which could make it vulnerable to selling if technology is pressured.

I suggest that investors place Jamf stock on their radar and look at price weakness as an opportunity.