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Investing.com - Canaccord Genuity lowered its price target on Freshworks Inc (NASDAQ:FRSH) to $19.00 from $23.00 on Thursday, while maintaining a Buy rating following the company’s third-quarter results. Despite trading near its 52-week low of $10.76, InvestingPro analysis indicates Freshworks is currently undervalued, with analyst targets ranging from $13 to $27.
Freshworks reported 15% constant currency revenue growth in the quarter, with non-GAAP operating margins of 21.0%, exceeding guidance by 520 basis points. The company also delivered 26.6% adjusted free cash flow, with cash flow growth outpacing revenue growth. InvestingPro data reveals Freshworks maintains impressive gross profit margins of 84.62%, though it remains unprofitable over the last twelve months.
The IT/EX business segment showed strength, reaching over $480 million in annual recurring revenue (ARR), representing 23% growth on a constant currency organic basis. This segment now accounts for 55% of total ARR and accelerated compared to the previous quarter.
Freshworks’ customer experience (CX) business ended the quarter with more than $390 million in ARR, growing at 7% on a constant currency basis, which was largely consistent with performance in the prior two quarters.
Canaccord highlighted the growth of Freshworks’ AI products, noting that AI ARR has doubled year-over-year as the company’s Freddy AI offerings continue to scale and grow quickly.
In other recent news, Freshworks Inc. reported its third-quarter 2025 earnings, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $0.16, exceeding the forecasted $0.13. Freshworks also reported revenue of $215.1 million, which was higher than the anticipated $208.72 million. These results highlight the company’s strong financial performance and strategic initiatives. Analysts had projected lower figures, making the actual results a positive surprise for investors. The company’s focus on AI and enterprise solutions has been noted as a contributing factor to its recent success. These developments have garnered attention from investment firms, although specific upgrades or downgrades were not detailed in the recent news. Freshworks’ financial results reflect a period of growth and achievement in its ongoing business strategies.
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