Jamf: Great Growth At A Reasonable Price As Security ARR Grows

In the ever-evolving landscape of enterprise software, few stories have captured the imagination of investors quite like Jamf Holding Corp. (JAMF). The company, which specializes in managing Apple devices for businesses, has emerged as a standout performer in 2025, driven by a 40% year-over-year surge in security Annual Recurring Revenue (ARR) to $203 million and a strategic acquisition that has fortified its position in the cybersecurity space. As the market grapples with rising IT spending and a renewed focus on digital transformation, the question on investors' minds is whether Jamf's current valuation—trading at a forward price-to-earnings (P/E) ratio of 7.41 and a price-to-sales (P/S) ratio of 1.9x—justifies a “Buy” rating.

Security ARR: The Engine of Growth

Jamf's security segment has become the linchpin of its growth strategy. In Q2 2025, security ARR accounted for 29% of total ARR, a testament to the company's ability to pivot toward high-margin offerings. This acceleration is not accidental. The acquisition of Identity Automation in 2024, which introduced dynamic identity and access management capabilities, has allowed Jamf to address a critical pain point for enterprises: securing access to sensitive data across Apple devices. According to a report by Bloomberg, this move has not only expanded Jamf's product portfolio but also created a flywheel effect, where enhanced security features drive higher customer retention and cross-selling opportunities.

The numbers tell a compelling story. With security ARR growing at 40% year-over-year, Jamf is outpacing broader industry trends. For context, the global enterprise cybersecurity market is projected to grow at a 12% CAGR through 2026. Jamf's ability to extract such outsized growth from a niche segment—Apple-centric security—highlights its unique positioning. As enterprises increasingly adopt Apple devices for their workforce (a trend accelerated by the rise of remote work), Jamf's expertise in managing and securing these ecosystems becomes a defensible moat.

Strategic Acquisitions and Operational Efficiency

The Identity Automation acquisition is emblematic of Jamf's disciplined approach to M&A. Unlike many tech companies that overpay for flashy targets, Jamf has focused on bolt-ons that align with its core competencies. The integration of Identity Automation has already yielded tangible results: non-GAAP operating income rose to $33.5 million in Q2 2025, translating to a 19% margin—a 200-basis-point improvement from the prior year. This margin expansion is critical, as it demonstrates Jamf's ability to scale efficiently while maintaining profitability.

Moreover, the company's reinvestment strategy is worth noting. In a recent investor call, management outlined plans to allocate capital toward enterprise sales and AI-driven security tools. This dual focus—on both organic innovation and strategic acquisitions—positions Jamf to capitalize on two of the most significant trends in enterprise software: the shift to AI-enhanced cybersecurity and the growing importance of identity management in hybrid work environments.

Valuation: A Bargain in Disguise?

Despite these strengths, Jamf's valuation remains unloved by many investors. At a forward P/E of 7.41, the stock trades at a discount to both its 5-year average (129.72) and the enterprise software industry average (15.2x). Similarly, its P/S ratio of 1.9x is significantly lower than the peer average of 3.9x. These metrics suggest that the market is underappreciating the company's long-term potential, perhaps due to short-term concerns about profitability. While Jamf still operates at a net loss (net margin of -7.4%), its unlevered free cash flow has surpassed $100 million, a 24% increase from the prior year. This cash flow generation, combined with a gross margin of 79.31%, indicates that the company is on a path to profitability.

Analyst sentiment further supports a bullish case. Eight of the 11 analysts covering the stock have assigned a “Buy” rating, with a median price target of $13.50—implying a 54% upside from current levels. The most optimistic forecast, from Joey Marincek at JMP Securities, projects a price of $27.00, a 278% gain. While such targets may seem ambitious, they are grounded in Jamf's ability to consistently exceed expectations. For instance, Q2 2025 revenue of $176.5 million beat guidance by $7 million, and the company raised its full-year revenue forecast to $701–704 million.

Market Tailwinds and Risks

The broader macroeconomic environment also favors Jamf. Global IT spending is expected to grow by 9.3% in 2025, with a significant portion directed toward cybersecurity and software solutions. Apple's own ecosystem is expanding: the App Store is projected to generate $161 billion in consumer spending by 2026, a trend that indirectly benefits Jamf by increasing the number of Apple devices in enterprise environments.

However, risks remain. Jamf's reliance on Apple's ecosystem makes it vulnerable to shifts in the tech giant's strategy. Additionally, while the security segment is growing rapidly, it is also highly competitive, with players like Microsoft and Google expanding their own offerings. That said, Jamf's deep integration with Apple's APIs and its first-mover advantage in the Apple enterprise space provide a buffer against these threats.

Conclusion: A Buy for the Long-Term

In conclusion, Jamf's accelerating security ARR, strategic acquisitions, and improving margins present a compelling case for a “Buy” rating. The company is not only capitalizing on the secular growth of enterprise cybersecurity but also doing so at a valuation that appears disconnected from its fundamentals. While short-term profitability concerns linger, the strength of its cash flow, the quality of its product innovations, and the robustness of its guidance suggest that the market will eventually recognize Jamf's true value. For investors with a multi-year horizon, this is a stock worth considering.