Needham analyst Scott Berg has maintained their bullish stance on FRSH stock, giving a Buy rating today.
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Scott Berg has given his Buy rating due to a combination of factors that highlight Freshworks’ strong performance and growth potential. The company reported impressive second-quarter results, with billings exceeding expectations and an acceleration in the growth rate of its customer experience segment. This growth is partly driven by the positive impact of AI products, marking Freshworks as a leader in leveraging AI among its peers.
Furthermore, the employee experience segment continues to be a significant growth driver, benefiting from larger deal sizes and higher win rates following the acquisition of Device42. Although AI-related revenues have surpassed the $20 million ARR level, they currently involve only a small fraction of Freshworks’ customer base, indicating substantial room for expansion. Additionally, Freshworks’ recent emphasis on partnerships has contributed significantly to new ARR, accounting for approximately one-third of the second quarter’s new ARR. Despite the increased investments planned for the second half of the year, which may limit profitability in the short term, these strategic moves position Freshworks for long-term growth.
According to TipRanks, Berg is an analyst with an average return of -4.0% and a 40.95% success rate. Berg covers the Technology sector, focusing on stocks such as PROS Holdings, Amplitude, and Paylocity.
In another report released today, Jefferies also maintained a Buy rating on the stock with a $20.00 price target.