(FRSH) Freshworks - Overview
Sector: Technology | Industry: Software - Application | Exchange: NASDAQ (USA) | Market Cap: 2.684m USD | Total Return: -39.5% in 12m
Avg Turnover: 99.1M
EPS Trend: 92.3%
Qual. Beats: 0
Rev. Trend: 99.9%
Qual. Beats: 6
Warnings
Altman Z'' -3.28 < 1.0 - financial distress zone
Tailwinds
Confidence
Freshworks Inc. (FRSH) is a global software-as-a-service (SaaS) provider specializing in AI-driven Customer Experience (CX) and Employee Experience (EX) solutions. The company’s product suite includes Freshdesk for customer support, Freshsales for CRM, and Freshservice for IT service management. By utilizing a unified cloud platform, Freshworks enables businesses to manage digital messaging, marketing automation, and internal incident lifecycles through conversational interfaces.
Operating within the Application Software sector, Freshworks utilizes a multi-tenant cloud architecture, a model that typically allows for high scalability and recurring revenue streams. The company’s recent integration of AI agents into its service desk products reflects a broader industry shift toward automating routine technical requests to reduce manual labor costs. You may find it useful to review the detailed valuation metrics for this ticker on ValueRay.
Headquartered in San Mateo, California, the firm has expanded its footprint across North America, Europe, and the Asia Pacific since its founding in 2010. Its recent acquisitions, such as Device42 and FireHydrant, indicate a strategic focus on enhancing IT asset discovery and infrastructure resilience for enterprise clients.
- AI-driven Freshservice adoption fuels high-margin enterprise employee experience revenue growth
- Expansion of multi-product platform usage increases net dollar retention rates
- Global macroeconomic slowdown pressures customer acquisition costs and SMB segment churn
- Operating margin improvement depends on successful integration of recent strategic acquisitions
- Intense competition in CRM and IT service management markets limits pricing power
| Net Income: 180.2m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.20 > 0.02 and ΔFCF/TA 9.83 > 1.0 |
| NWC/Revenue: 55.87% < 20% (prev 104.1%; Δ -48.25% < -1%) |
| CFO/TA 0.16 > 3% & CFO 255.3m > Net Income 180.2m |
| Net Debt (-711.0m) to EBITDA (63.7m): -11.16 < 3 |
| Current Ratio: 1.94 > 1.5 & < 3 |
| Outstanding Shares: last quarter (283.3m) vs 12m ago -5.96% < -2% |
| Gross Margin: 84.97% > 18% (prev 84.39%; Δ 0.58% > 0.5%) |
| Asset Turnover: 55.37% > 50% (prev 48.76%; Δ 6.61% > 0%) |
| Interest Coverage Ratio: error (cannot be calculated; needs correct EBIT TTM and Interest Expense TTM) |
| A: 0.30 (Total Current Assets 1.01b - Total Current Liabilities 520.1m) / Total Assets 1.61b |
| B: -2.22 (Retained Earnings -3.56b / Total Assets 1.61b) |
| C: 0.02 (EBIT TTM 30.1m / Avg Total Assets 1.57b) |
| D: 1.74 (Book Value of Equity 1.02b / Total Liabilities 586.2m) |
| Altman-Z'' = -3.28 = D |
| DSRI: 0.98 (Receivables 127.3m/112.3m, Revenue 871.2m/751.5m) |
| GMI: 0.99 (GM 84.39% / 84.97%) |
| AQI: 1.76 (AQ_t 0.32 / AQ_t-1 0.18) |
| SGI: 1.16 (Revenue 871.2m / 751.5m) |
| TATA: -0.05 (NI 180.2m - CFO 255.3m) / TA 1.61b) |
| Beneish M = -2.49 (Cap -4..+1) = BBB |
As of June 07, 2026, the stock is trading at USD 9.45 with a total of 6,369,349 shares traded.
Over the past week, the price has changed by -2.68%,
over one month by +2.83%,
over three months by +9.63% and
over the past year by -39.46%.
Freshworks has received a consensus analysts rating of 3.94. Therefore, it is recommended to buy FRSH.
- StrongBuy: 7
- Buy: 4
- Hold: 5
- Sell: 0
- StrongSell: 1
| Analysts Target Price | 11.8 | 24.3% |
P/E Trailing = 15.918
P/E Forward = 15.6495
P/S = 3.0811
P/B = 2.6309
P/EG = 0.5215
Revenue TTM = 871.2m USD
EBIT TTM = 30.1m USD
EBITDA TTM = 63.7m USD
Long Term Debt = unknown (none)
Short Term Debt = unknown (none)
Debt = 68.2m USD (from shortLongTermDebtTotal, last quarter) + Leases 38.8m
Net Debt = -711.0m USD (calculated: Debt 68.2m - CCE 779.2m)
Enterprise Value = 1.97b USD (2.68b + Debt 68.2m - CCE 779.2m)
Interest Coverage Ratio = unknown (Ebit TTM 30.1m / Interest Expense TTM 0.0)
EV/FCF = 6.19x (Enterprise Value 1.97b / FCF TTM 318.7m)
FCF Yield = 16.15% (FCF TTM 318.7m / Enterprise Value 1.97b)
FCF Margin = 36.58% (FCF TTM 318.7m / Revenue TTM 871.2m)
Net Margin = 20.69% (Net Income TTM 180.2m / Revenue TTM 871.2m)
Gross Margin = 84.97% ((Revenue TTM 871.2m - Cost of Revenue TTM 131.0m) / Revenue TTM)
Gross Margin QoQ = 84.83% (prev 85.56%)
Tobins Q-Ratio = 1.23 (Enterprise Value 1.97b / Total Assets 1.61b)
Interest Expense / Debt = 0.0% (Interest Expense 0.0 / Debt 68.2m)
Taxrate = 21.0% (US federal default 21%)
NOPAT = 23.8m (EBIT 30.1m * (1 - 21.00%))
Current Ratio = 1.87 (Total Current Assets 1.01b / Total Current Liabilities 538.6m)
Debt / Equity = 0.07 (Debt 68.2m / totalStockholderEquity, last quarter 1.02b)
Debt / EBITDA = -11.16 (Net Debt -711.0m / EBITDA 63.7m)
Debt / FCF = -2.23 (Net Debt -711.0m / FCF TTM 318.7m)
Total Stockholder Equity = 972.0m (last 4 quarters mean from totalStockholderEquity)
RoA = 11.45% (Net Income 180.2m / Total Assets 1.61b)
RoE = 18.54% (Net Income TTM 180.2m / Total Stockholder Equity 972.0m)
RoCE = 2.78% (EBIT 30.1m / Capital Employed (Total Assets 1.61b - Current Liab 520.1m))
RoIC = 2.28% (NOPAT 23.8m / Invested Capital 1.04b)
WACC = 10.34% (E(2.68b)/V(2.75b) * Re(10.60%) + D(68.2m)/V(2.75b) * Rd(0.0%) * (1-Tc(0.21)))
Discount Rate = 10.60% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -42.22 | Cagr: -1.92%
[DCF] Terminal Value 71.82% ; FCFF base≈253.0m ; Y1≈290.0m ; Y5≈426.8m
[DCF] Fair Price = 21.65 (EV 4.75b - Net Debt -711.0m = Equity 5.46b / Shares 252.4m; r=10.34% [WACC]; 5y FCF grow 15.0% → 2.50% )
EPS Correlation: 92.34 | EPS CAGR: 79.16% | SUE: 0.0 | # QB: 0
Revenue Correlation: 99.86 | Revenue CAGR: 18.94% | SUE: 2.20 | # QB: 6
EPS current Quarter (2026-06-30): EPS=0.13 | Chg30d=+3.08% | Revisions=+33% | Analysts=15
EPS next Quarter (2026-09-30): EPS=0.18 | Chg30d=+16.83% | Revisions=+78% | Analysts=15
EPS current Year (2026-12-31): EPS=0.62 | Chg30d=+8.31% | Revisions=+67% | GrowthEPS=-5.5% | GrowthRev=+14.6%
EPS next Year (2027-12-31): EPS=0.80 | Chg30d=+16.11% | Revisions=+78% | GrowthEPS=+28.7% | GrowthRev=+14.2%
[Analyst] Revisions Ratio: +78%