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Investing.com - Cantor Fitzgerald has maintained its Overweight rating and $20.00 price target on Freshworks Inc (NASDAQ:FRSH), currently trading at $13.92, following the company’s second-quarter results. According to InvestingPro data, the company maintains impressive gross profit margins of 84.39% and has shown strong revenue growth of 20.46% over the last twelve months.
The firm highlighted Freshworks’ "solid beat and raise" performance in the quarter, noting particular strength in the company’s Employee Experience (EX) business, which grew 22% year-over-year on a constant currency basis. The Customer Experience (CX) segment showed improvement with growth accelerating to 8% in constant currency, up 100 basis points quarter-over-quarter. InvestingPro analysis reveals that net income is expected to grow this year, with analysts predicting profitability in 2025.
Large customer growth emerged as a key positive indicator, with customers generating over $50,000 in annual recurring revenue increasing by 22%. This up-market performance contributed to improved operating profit margin and free cash flow margin results.
Management updated its full-year guidance by incorporating the second-quarter revenue outperformance while increasing operating income by less than the second-quarter beat. The earnings per share guidance remained unchanged due to planned growth investments in artificial intelligence, go-to-market headcount, and brand spending expected in the second half of the year. According to InvestingPro’s Fair Value analysis, Freshworks appears undervalued at current levels, with 6 additional ProTips available for subscribers.
Cantor Fitzgerald expressed continued optimism about Freshworks’ outlook, specifically regarding Employee Experience growth and improving Customer Experience performance, supporting its maintained Overweight rating and 12-month price target of $20. With a market capitalization of $4.1 billion and strong financial health metrics, detailed analysis of Freshworks’ potential is available in the comprehensive Pro Research Report on InvestingPro.
In other recent news, Freshworks Inc. reported its second-quarter 2025 earnings, surpassing market expectations with an earnings per share (EPS) of $0.18, compared to the forecast of $0.12. The company’s revenue reached $204.7 million, exceeding the anticipated $198.84 million. Freshworks also reported better-than-expected billings in the second quarter, with its Customer Experience (CX) segment accelerating its Annual Recurring Revenue (ARR) growth rate from 8% in the previous quarter to 11% in Q2. Analyst firms have responded positively to these results. Needham reiterated a Buy rating with a $25.00 price target, noting the growth in the company’s AI segment. Similarly, JMP Securities maintained its Market Outperform rating and a $27.00 price target, highlighting the company’s strong Q2 performance with a 21.9% operating margin. These developments reflect a positive outlook from analysts regarding Freshworks’ recent performance.
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