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On Wednesday, JMP Securities increased its price target for Freshworks Inc (NASDAQ:FRSH) shares to $27, up from the previous $24, while maintaining a Market Outperform rating. The firm’s decision comes in the wake of Freshworks reporting fourth-quarter results that surpassed expectations. According to InvestingPro data, Freshworks maintains impressive gross profit margins of 83.84% and demonstrates strong financial health with a current ratio of 3.26, indicating robust operational efficiency. The company’s non-GAAP earnings per share (EPS) reached $0.14, which was higher than the consensus estimate of $0.10. Freshworks’ revenue for the quarter was $195 million, also exceeding the forecasted $190 million, marking a year-over-year increase of 22%. This growth includes a $10.3 million or seven-point benefit from the acquisition of Device 42, which kept pace with the 22% growth from the previous quarter.
The company’s billings for the quarter stood at $222 million, surpassing the consensus of $211 million and representing a 23% increase from the same period last year. This figure includes a six-point benefit from the acquisition of Device42, showing an improvement from the 19% growth rate in the previous quarter. Following these robust results, Freshworks’ stock experienced an approximate 4% rise in the aftermarket. With a market capitalization of $5.4 billion and consistent revenue growth of 20.45% over the last twelve months, InvestingPro analysis suggests the stock is currently trading below its Fair Value. This uptick adds to an already positive trend for the company, which has seen its shares climb 10% year-to-date, outperforming the 3% increase of the Russell 3000 index.
JMP Securities’ analyst highlighted the company’s better-than-expected performance in the fourth quarter of 2024, which was bolstered by both organic growth and the strategic acquisition of Device 42. The analyst’s commentary reflects confidence in Freshworks’ ability to maintain a strong growth trajectory.
Investors responded positively to the company’s financial achievements, with the aftermarket stock price reflecting optimism about Freshworks’ future prospects. The firm’s upward revision of the price target is indicative of its belief in the continued success and market performance of Freshworks Inc.
In other recent news, Freshworks Inc. reported a surge in its Q4 earnings, exceeding analyst expectations. The AI-powered service software provider posted an adjusted earnings per share of $0.14, surpassing the analyst estimate of $0.10. Revenue was reported at $194.6 million, beating the consensus forecast of $189.5 million, marking a 22% increase year-over-year. This strong performance was attributed to a rise in customer adoption of its modern employee and customer experience solutions.
In addition to these financial highlights, Freshworks reported that 22,558 customers were contributing more than $5,000 in annual recurring revenue, an 11% increase year-over-year. According to CEO and President Dennis Woodside (OTC:WOPEY), this success is due to companies opting for Freshworks’ uncomplicated service solutions over legacy vendors.
Looking forward, Freshworks provided guidance for fiscal year 2025, projecting a revenue range between $809 million and $821 million, slightly above the analyst consensus of $813.5 million. These recent developments reflect the company’s strong financial health and positive outlook.
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