Street Calls of the Week
Investing.com - Oppenheimer has reiterated an Outperform rating and $19.00 price target on Freshworks Inc (NASDAQ:FRSH) following the company’s investor day. Currently trading at $12.91, the stock sits below analyst targets ranging from $16 to $27, with InvestingPro analysis indicating the stock is undervalued.
The firm noted that Freshworks management provided a positive business update during the event, highlighting growth opportunities, increasing operating efficiency, AI adoption momentum, technology roadmap, and greater financial transparency. The company’s strong financial health is reflected in its impressive 84.62% gross profit margins and robust revenue growth of 19.78% over the last twelve months.
Oppenheimer identified five key factors supporting its bullish view: durable growth in IT Service Management (ITSM) and IT Asset Management (ITAM), continuing operating efficiency to maintain a Rule-of-40+ business profile, upmarket business reaching an inflection point with AI improving sales, multiple levers for Net Revenue Retention (NRR) expansion, and a growing AI business with 5,000 paid Freddy AI customers generating over $20 million in recurring revenue. InvestingPro data reveals the company holds more cash than debt and maintains a healthy current ratio of 2.63, supporting its growth initiatives. Get access to 8 more exclusive InvestingPro Tips and comprehensive analysis with a subscription.
The firm specifically recommended Freshworks for investors seeking a "durable mid-teens grower with strong margins at a reasonable price."
Freshworks provides customer and employee engagement software for businesses of all sizes, with its AI assistant Freddy becoming an increasingly important component of its growth strategy.
In other recent news, Freshworks Inc has garnered attention following its second-quarter financial results. Cantor Fitzgerald reiterated its Overweight rating with a $20.00 price target, citing a "solid beat and raise" performance. The company’s Employee Experience business grew by 22% year-over-year, while the Customer Experience segment saw an improvement with 8% growth. Piper Sandler raised its price target to $25.00, maintaining an Overweight rating, highlighting Freshworks’ performance exceeding the Rule of 40, driven by a 27% free cash flow margin.
Needham continues to support Freshworks with a Buy rating and a $25.00 price target, emphasizing the company’s new FY28 financial model aiming for increased revenue growth and free cash flow leverage. JMP Securities also reiterated its Market Outperform rating with a $27.00 price target following an Investor Day event. Oppenheimer maintains an Outperform rating with a $19.00 price target, highlighting discussions on Freshworks’ market opportunities and AI momentum. These developments indicate continued analyst confidence in Freshworks’ growth trajectory.
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