Freshworks Rises 41% in 6 Months: Is the Stock Still Worth Buying?

Core Viewpoint - Freshworks Inc. (FRSH) has shown significant stock performance, rallying 41.4% over the past six months, outperforming key indices and sectors [1] Company Overview - Freshworks is a leading provider of AI and SaaS-based customer and employee experience solutions, serving over 72,000 companies globally, and is gaining market share by replacing costly legacy systems [3] - The company offers a wide range of solutions including IT service management, IT asset management, IT operations management, enterprise service management, and customer service management, which allows for effective upselling and cross-selling [3] Business Segment Performance - The employee experience (EX) segment grew 35% year over year in Q4 2024, surpassing $400 million in annual recurring revenues [4] - The customer experience (CX) segment, which includes products like Freshdesk and Freshsales, grew 7$360 million in annual recurring revenues in Q4 2024 [5] Revenue and Earnings Projections - Freshworks anticipates revenue for 2025 to be in the range of $809-$821 million, with a Zacks Consensus Estimate of $815.1 million, indicating a year-over-year growth of 13.14% [6] - The expected bottom line for 2025 is projected to be between 52-54 cents per share, with a Zacks Consensus Estimate of 53 cents per share, reflecting a year-over-year growth of 23.3% [7] Competitive Positioning - Freshworks has significant room for expansion in the customer relationship management space, targeting customers of legacy vendors like Oracle and SAP, as well as competing against ServiceNow and Atlassian in the employee experience suite market [9][10] - The company is preferred by organizations due to its unified suite that reduces the total cost of ownership compared to maintaining separate systems, thus avoiding integration challenges [11] Conclusion - Freshworks is rapidly capturing market share in both customer relationship management and employee experience sectors, driven by strong traction in its AI solutions, making it an attractive investment opportunity for long-term rewards [12]