Freshworks (FRSH) & The Competition Financial Analysis

Freshworks (NASDAQ:FRSH) is one of 959 publicly-traded companies in the “Software” industry, but how does it contrast to its peers? We will compare Freshworks to related businesses based on the strength of its institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Insider & Institutional Ownership

75.6% of Freshworks shares are held by institutional investors. Comparatively, 41.5% of shares of all “Software” companies are held by institutional investors. 8.5% of Freshworks shares are held by company insiders. Comparatively, 19.9% of shares of all “Software” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Freshworks and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freshworks	0	7	8	2	2.71
Freshworks Competitors	5842	21623	45017	1501	2.57

Freshworks presently has a consensus target price of $15.92, indicating a potential upside of 25.33%. As a group, “Software” companies have a potential upside of 28.90%. Given Freshworks’ peers higher probable upside, analysts clearly believe Freshworks has less favorable growth aspects than its peers.

Profitability

This table compares Freshworks and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freshworks	22.28%	8.01%	5.00%
Freshworks Competitors	-599.60%	26.31%	-8.93%

Volatility and Risk

Freshworks has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, Freshworks’ peers have a beta of 1.36, indicating that their average stock price is 36% more volatile than the S&P 500.

Valuation and Earnings

This table compares Freshworks and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Freshworks	$838.81 million	$183.72 million	17.40
Freshworks Competitors	$1.79 billion	$382.68 million	111.96

Freshworks’ peers have higher revenue and earnings than Freshworks. Freshworks is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Freshworks peers beat Freshworks on 8 of the 13 factors compared.

Freshworks Company Profile

Freshworks Inc. develops cloud-based software designed to help businesses manage customer and employee experiences. Its products support customer service, sales, marketing and IT service management, with tools for handling support requests, communicating with customers and managing internal service workflows. The company’s offerings include Freshdesk for customer support, Freshservice for IT and employee service management, and Freshsales for sales teams. Freshworks also provides customer messaging and marketing products, along with artificial intelligence features that assist with service and support tasks.