Jamf Holding Corp.: Tagging Along With The Growth Of Apple

Flat Lay of different apple products on a grey background.

Shahid Jamil

Thesis highlights

I believe Jamf Holding (NASDAQ:JAMF) is undervalued today. JAMF is a company that specializes in Apple (AAPL) Business Management and offers a cloud-based platform for the full lifecycle enterprise IT management of Apple devices. The company has a strong relationship with Apple and support from Jamf Nation and has a lot of room to expand as Apple continues to increase its market share.

Company overview

When it comes to Apple Business Management, JAMF is your go-to. Without ever touching the devices themselves, they help businesses establish a secure network for their Apple products, apps, and internal resources in the cloud.

Apple is eating the world?

The Apple brand is the most valuable in the world. Apple’s success can be attributed to the company’s pioneering use of hardware, software, and cloud services to give its customers the best possible experience. By putting the consumer first and optimizing everything for an Apple experience, it has altered the technological landscape.

In the past, Microsoft (MSFT) Windows was the standard in endpoint technology, especially in the business world. Numerous businesses have put uniformity over user satisfaction to ease the process of deploying, securing, and managing a large number of Windows PCs. Device selection was rarely a matter of employee preference. Apple, on the other hand, released a slew of game-changing products in the 2000s that altered people’s relationships with their electronic devices. They were all designed with the user in mind, and that’s why they all run Apple’s iOS. The meteoric ascent of iOS devices, coupled with the widespread use of web-based apps, produced a “halo effect” that revived Apple’s Macintosh computer.

The devices made it possible for anyone, regardless of their level of technical knowledge, to take advantage of advanced functionality. Many workers found that Apple’s consumer-focused technology was more powerful, more intuitive, and faster than what they had been using in the workplace.

Given Windows’ massive popularity, it is not surprising that virtually all legacy solutions for supporting enterprise endpoint devices are built on the MSFT operating system. Because they are antiquated, Windows-centric, or universally applicable to all devices, legacy solutions fall short of delivering a seamless Apple user experience. Cross-platform solutions that are universally applicable to all devices typically employ the most basic features of the technology that is widely available in the relevant ecosystems. To aid businesses in automating their IT operations, tech giants like Apple, Microsoft, and Google have all released device-specific cloud services. To take advantage of these cloud services to their full potential, one must pay close attention to the ecosystem that supports them. In my opinion, legacy solutions do not take advantage of Apple’s capabilities and do not deliver the full Apple experience.

As Apple grows, so does JAMF

I think the TAM is huge, and there’s a lot of room for JAMF to expand, particularly as Apple continues to increase its market share. Data from the JAMF prospectus indicates that Apple Enterprise Management’s global TAM will increase by $23.4 billion in value by 2024. I anticipate that as Apple introduces new devices for enterprise management-like the Apple Watch-the market opportunity for JAMF will expand. In addition, I think JAMF has room to expand as it creates new solutions to better assist businesses in managing their Apple ecosystems in light of Apple’s future innovations.

JAMF is the standard for Apple Enterprise Management

JAMF’s SaaS solutions offer a centralized framework for managing Apple products at the end-user level. This platform is made to help IT departments, both technical and non-technical, manage Apple devices and provide employees with a consistent, high-quality Apple experience. It is challenging to provide the same user experience at work as at home because many businesses either don’t offer employees a choice of devices or use legacy methods to manage Apple products. The software solutions provided by JAMF make it possible for employees to use their personal Apple devices in the workplace in the same secure and private manner as they do at home.

JAMF has a very strong relationship with Apple and backing from Jamf Nation

JAMF has built its business around being Apple’s primary enterprise solution, and as such, it is the largest vertically-focused Apple infrastructure and security platform in the world. I believe that JAMF’s capacity to take full advantage of and expand the functionality of Apple products and services is made possible by its cooperative relationship with Apple and its acquired technical knowledge and experience. More importantly, JAMF’s familiarity with Apple’s development programs and ability to work closely with them ensure that the organization can fully support all future Apple innovations and OS releases as soon as they become available.

The Jamf Community, along with JAMF’s established relationship with Apple, makes for a powerful duo. There is no larger community of IT professionals than Jamf Nation when it comes to Apple in the workplace. An excellent Q&A engine for queries about Apple and Jamf deployments is provided by this active, bottom-up community. Since the website went live, JAMF has attracted the participation of over 100,000 people. This may not appear to be an upside to anyone else, but I find it to be quite useful. This is because the devoted Jamf community is a boon to both existing and potential customers, in addition to being a gold mine of ideas and criticisms for the JAMF product roadmap. Moreover, it’s a fantastic method of introducing new customers to Jamf’s offerings.

Strong partnership ecosystem

JAMF has published a wide range of open APIs that can be used to supplement and improve existing software due to its in-depth knowledge of corporate users and decades of experience handling the Apple ecosystem. This strategy seems to have paid off well for JAMF, as the company has built up a large ecosystem with hundreds of integrations and solutions, which shows how well it worked.

JAMF does not rely solely on its own in-house programmers, but instead, collaborates with outside companies to find optimal solutions. By syncing Jamf inventory data with Microsoft Endpoint Manager, for example, clients can get a bird’s-eye view of their company’s fleet across all device makes and models. Many operational advantages result from the integration as well. This includes, for example, enforcing conformity guidelines and ensuring that only compliant Apple devices have access to secure company resources such as Office 365. In addition, the self-service application provided by Jamf makes it simpler for end users to address device compliance issues.

Valuation

My model suggests a price target of $31.67 in FY23. This assumes that revenue will continue growing as it has historically, at 20%, and the forward EBITDA multiple will be 36x in FY23e.

Valuation

Own valuation

Given the growing size of the market, I anticipate JAMF will be able to sustain its rapid expansion beyond the projected results for FY22 (which are based on management guidance). Since JAMF is working to increase profits and reduce expenses, I expected the company’s EBITDA margin to grow over time.

In my opinion, JAMF will maintain its current valuation of 36 times forward EBITDA as the company’s growth profile and runway are expected to remain consistent through FY23.

Risk

Competition with Apple

Jamf’s current product suite fills the void in device management left by Apple, enabling business and educational customers to make the most of their Apple gadgets. But Apple might fill this gap with its own products and services in the future, getting rid of the need for a “middleman.”

Conclusion

I believe JAMF is undervalued. The company’s software allows technical and non-technical IT staff to manage end-users’ Apple devices, preserving the premium Apple user experience. As Apple’s market share increases and the company introduces new enterprise management devices, I expect JAMF’s market opportunity to expand as well.

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