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Freshworks
(NASDAQ:FRSH)
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Rating:82Outperform
Price Target:
$16.00
▲(24.42% Upside)
Action:Reiterated
Date:08/05/26
The score is driven primarily by improving fundamentals (profitability and strong cash flow with minimal leverage) and a constructive technical uptrend. Earnings call guidance and EX/AI momentum add support, while near-overbought momentum readings and only moderate valuation support (no dividend) temper the upside.
Positive Factors
Revenue growth and profitability inflection
Freshworks is combining mid-teens growth with high SaaS gross margins and improving profitability. This supports scalable economics and gives the company more internal funding for product investment, sales expansion and AI development.
Negative Factors
Customer experience growth remains modest
The CX business remains a large portion of the portfolio but is growing slowly. Persistent low-single-digit expansion could limit consolidated growth and increase dependence on EX and IT products to sustain overall momentum.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue growth and profitability inflection
Freshworks is combining mid-teens growth with high SaaS gross margins and improving profitability. This supports scalable economics and gives the company more internal funding for product investment, sales expansion and AI development.
Read all positive factors
Freshworks (FRSH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.37B
Dividend YieldN/A
Average Volume (3M)22.96M
Price to Earnings (P/E)20.8
Beta (1Y)1.53
Revenue Growth15.57%
EPS GrowthN/A
CountryUS
Employees4,500
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.66
Shares Outstanding236,959,440
10 Day Avg. Volume15,390,178
30 Day Avg. Volume22,956,854
Financial Highlights & Ratios
PEG Ratio-0.07
Price to Book (P/B)3.45
Price to Sales (P/S)4.25
P/FCF Ratio14.54
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$15.25Price Target Upside18.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)0.62
Revenue Forecast (FY)$961.27M
Freshworks Business Overview & Revenue Model
Company Description
Freshworks Inc., a software development company, provides software-as-a-service products in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company’s software-as-a-service solutions includes Customer Expe...
How the Company Makes Money
Freshworks primarily makes money by selling subscriptions to its cloud software products (SaaS). Revenue is generated through recurring fees customers pay to access Freshworks applications, typically priced by product, feature tier/edition, and us...
Freshworks Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call highlights clear and broad momentum: strong top-line growth (16% YoY), sustained EX strength (24% CC ARR growth), notable AI adoption and productivity gains, positive GAAP and non-GAAP profitability, healthy cash generation, and successful capital returns via buybacks. Offsetting items are concentrated and modest: CX growth is slower (low single digits), some legacy Device42 on-prem transitions create NDR noise, AI monetization for certain products remains early, and FX created small headwinds. Overall, the positive operational and financial developments, particularly the EX and AI traction and achievement of GAAP profitability, materially outweigh the limited lowlights.Positive Updates
Revenue Growth and Record Beat
Total revenue $237.4M in Q2, up 16% year-over-year (15% constant currency), exceeding the high end of estimates and representing a sequential acceleration vs prior quarter.
Negative Updates
CX Business Growth is Modest
CX ARR $400M, up only 4% on a constant currency basis (3% as reported). Management expects CX ARR to grow in the low single digits for full year 2026, reflecting a deliberate focus on profitability and steady-state growth rather than acceleration.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth and Record Beat
Total revenue $237.4M in Q2, up 16% year-over-year (15% constant currency), exceeding the high end of estimates and representing a sequential acceleration vs prior quarter.
Read all positive updates
Company Guidance
Freshworks guided Q3 revenue of $244.5–$245.5M (≈14% y/y, ~14–15% constant‑currency) with a $0.5M FX headwind, non‑GAAP operating income of $59–61M and non‑GAAP EPS of ~$0.18 on ~266M weighted shares (24% tax rate assumption); Q3 billings growth is expected ~13% as‑reported/~14% CC and management said NDR and EX NDR should be roughly the same in Q3. For full‑year 2026 they expect revenue of $963.5–$966.5M (~15% y/y, 14–15% CC) with a $2M FX headwind, non‑GAAP operating income of $222–228M, non‑GAAP EPS of $0.66–0.68 on ~273M weighted shares, ~ $265M adjusted free cash flow (27.5% margin) and an adjusted FCF per‑share target of $0.94 (up 24% vs FY2025); they also reiterated EX ARR should exceed $600M exiting 2026 and CX ARR is expected to grow low single digits for the year.Freshworks Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
86
Very Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 903.87M | 838.81M | 720.42M | 596.43M | 498.00M | 371.02M |
| Gross Profit | 767.96M | 712.66M | 607.09M | 493.06M | 402.23M | 292.99M |
| EBITDA | 77.62M | 110.84M | -109.53M | -111.63M | -212.48M | -168.19M |
| Net Income | 185.19M | 183.72M | -95.37M | -137.44M | -232.13M | -192.00M |
Balance Sheet | ||||||
| Total Assets | 1.49B | 1.60B | 1.61B | 1.46B | 1.38B | 1.48B |
| Cash, Cash Equivalents and Short-Term Investments | 664.11M | 781.37M | 1.07B | 1.19B | 1.15B | 1.32B |
| Total Debt | 25.57M | 42.50M | 38.29M | 29.49M | 34.95M | 0.00 |
| Total Liabilities | 594.52M | 570.06M | 473.96M | 384.51M | 328.40M | 244.77M |
| Stockholders Equity | 895.94M | 1.03B | 1.14B | 1.07B | 1.05B | 1.24B |
Cash Flow | ||||||
| Free Cash Flow | 249.75M | 245.22M | 145.98M | 77.84M | -14.77M | 2.34M |
| Operating Cash Flow | 255.26M | 250.92M | 160.65M | 86.18M | -2.52M | 11.46M |
| Investing Cash Flow | 175.12M | 206.13M | 38.80M | 158.50M | -284.83M | -420.30M |
| Financing Cash Flow | -412.25M | -445.20M | -67.26M | -60.62M | -156.35M | 1.06B |
Freshworks Technical Analysis
Positive
12.86
Price Trends
11.02
Positive
9.93
Positive
10.13
Positive
Market Momentum
0.60
Negative
63.20
Neutral
78.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRSH, the sentiment is Positive. The current price of 12.86 is above the 20-day moving average (MA) of 12.27, above the 50-day MA of 11.02, and above the 200-day MA of 10.13, indicating a bullish trend. The MACD of 0.60 indicates Negative momentum. The RSI at 63.20 is Neutral, neither overbought nor oversold. The STOCH value of 78.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRSH.
Freshworks Risk Analysis
Freshworks disclosed 63 risk factors in its most recent earnings report. Freshworks reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Freshworks Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $3.37B | 20.85 | 19.50% | ― | 15.57% | ― | |
79 Outperform | $3.23B | 78.76 | 13.46% | ― | 14.38% | 203.15% | |
75 Outperform | $3.47B | -30.44 | -20.29% | ― | 26.95% | -11.66% | |
73 Outperform | $2.27B | 75.23 | 3.36% | ― | 8.57% | ― | |
73 Outperform | $3.09B | -84.04 | -10.77% | ― | 14.62% | -120.98% | |
62 Neutral | $2.18B | -14.73 | -92.84% | ― | 9.47% | 31.43% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
FRSH
Freshworks
13.69
0.16
1.18%
AGYS
Agilysys
120.50
11.41
10.46%
NCNO
nCino
23.32
-8.78
-27.35%
ASAN
Asana
10.17
-4.39
-30.15%
INTA
Intapp
43.70
-2.72
-5.86%
BRZE
Braze
34.09
6.69
24.42%
Freshworks Corporate Events
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Freshworks Delivers Record Q2 Results and Raises Guidance
Positive
Aug 4, 2026
Freshworks Inc. is a Nasdaq-listed software company focused on customer and employee engagement, offering cloud-based IT service management, CRM and support solutions tailored to mid-market and agile enterprise customers. The company emphasizes AI...
Business Operations and StrategyExecutive/Board Changes
Freshworks Appoints New Chief Product and Technology Officer
Positive
Jul 28, 2026
On July 28, 2026, Freshworks Inc. announced the appointment of Ryan Manning as Chief Product and Technology Officer, effective August 10, 2026, placing him in charge of the company’s global product and engineering functions. The move signals...
Executive/Board ChangesShareholder Meetings
Freshworks Stockholders Back Directors, Pay, and Auditor Choices
Positive
May 29, 2026
On May 28, 2026, Freshworks Inc. held its 2026 Annual Meeting of Stockholders via live webcast, where shareholders elected four Class II directors—Roxanne S. Austin, Sameer Gandhi, Frank Pelzer, and Dennis Woodside—to terms running unt...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.