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On Wednesday, Freshworks Inc (NASDAQ:FRSH), a $4.26 billion market cap software company with a "GOOD" InvestingPro Financial Health score, saw its shares surge in after-market trading following impressive first-quarter financial results for the year 2025. JMP Securities analyst Patrick Walravens has reiterated a Market Outperform rating and maintained a $27.00 price target on the stock, joining 10 other analysts who have recently revised their earnings expectations upward.
Freshworks reported non-GAAP earnings per share (EPS) of $0.18, surpassing the consensus estimate of $0.13. The company’s operating margin reached 23.6% on revenue of $196 million, which also exceeded the consensus revenue projection of $192 million. This revenue figure represents a year-over-year increase of 19%, although it is a slight decrease from the 22% growth rate reported in the previous quarter. The company maintains impressive gross profit margins of 84.39%, according to InvestingPro data, which offers 8 additional key insights about Freshworks’ financial performance.
In addition to the strong earnings and revenue, Freshworks’ billings for the quarter were $203 million, which was above the consensus estimate of $198 million and marked a 16% year-over-year increase. However, this too was a decline from the 23% growth rate in billings observed in the last quarter.
The positive financial results led to a significant uptick in Freshworks’ stock price, which rose approximately 10% in after-market trading. This rebound came after the stock had experienced an 11% decline year-to-date, in contrast to a 6% decline in the Russell 3000 index. According to InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels, with strong fundamentals including a healthy current ratio of 2.89 and minimal debt-to-equity of 0.02.
Walravens’ confidence in Freshworks is reflected in the reiteration of the Market Outperform rating and the $27 price target, signaling a positive outlook for the company’s stock performance. The positive reaction in after-market trading underscores investor enthusiasm following the company’s financial achievements in the first quarter of 2025. For deeper insights into Freshworks’ valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Freshworks Inc. reported strong financial results for the first quarter of 2025, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.18, exceeding the forecasted $0.13, and reported revenue of $196.3 million, which was higher than the anticipated $192.08 million. This performance reflects a significant year-over-year revenue growth of 19%. Freshworks also expanded its non-GAAP operating margin by 10 percentage points to 24%. Analysts from Baird and Morgan Stanley (NYSE:MS) expressed optimism about Freshworks’ strategic direction, particularly its focus on AI-driven products. The company added over 1,000 new clients during the quarter, including notable names like Freudenberg Group and All3Media. Freshworks’ continued investment in AI and operational efficiency has been well-received, as evidenced by its strong customer acquisition and retention metrics. Looking ahead, Freshworks projects full-year 2025 revenue between $815.3 million and $824.3 million, indicating a growth rate of 13-14%.
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