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Investing.com - Needham has reiterated a Buy rating and $25.00 price target on Freshworks Inc (NASDAQ:FRSH) following the company’s second-quarter results. According to InvestingPro data, analyst targets range from $18 to $27, with the stock currently trading at $13.91, suggesting significant upside potential. The company’s overall financial health is rated as GOOD by InvestingPro’s comprehensive analysis.
Freshworks 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, according to Needham.
The Employee Experience (EX) segment remains Freshworks’ primary growth driver, delivering 24% reported ARR growth, benefiting from larger deal sizes and higher win rates following the Device42 acquisition.
Artificial Intelligence-related revenues have surpassed the $20 million ARR level but currently reach only 2,000 of Freshworks’ approximately 70,000 customers, indicating a substantial expansion opportunity for the company.
Freshworks’ recent partner initiative is showing positive results, accounting for approximately one-third of new ARR in the second quarter, though the company plans to increase second-half investments, which will limit the flow-through of second-quarter profitability outperformance to full-year guidance.
In other recent news, Freshworks Inc. reported its second-quarter 2025 earnings, surpassing market expectations with a non-GAAP earnings per share of $0.18, exceeding the consensus estimate of $0.11. The company also reported revenue of $204.7 million, which was higher than the anticipated $198.84 million. Freshworks achieved a 21.9% operating margin in this period. JMP Securities has reiterated its Market Outperform rating for Freshworks, maintaining a price target of $27.00 following the strong earnings report. The firm’s positive outlook reflects confidence in Freshworks’ performance. These developments highlight the company’s ability to exceed financial forecasts and maintain strong operational metrics.
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