Healthy Upside Potential: Freshworks Inc. (FRSH)

Freshworks Inc. (NASDAQ: FRSH) stock fell -4.56% on Thursday to $14.44 against a previous-day closing price of $15.13. With 3.57 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.66 million shares. During the session, the Software – Application company that operates in wider Technology sector, reached to the highest price of $15.29 whereas the lowest price it dropped to was $14.37. The 52-week range on FRSH shows that it touched its highest point at $18.14 and its lowest point at $10.51 during that stretch. It currently has a 1-year price target of $17.93.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of FRSH was down-trending over the past week, with a drop of -5.87%, but this was up by 5.40% over a month. Three-month performance dropped to -3.02% while six-month performance rose 10.82%. The stock gained 4.18% in the past year, while it has lost -1.84% so far this year. A look at the trailing 12-month EPS for FRSH yields -0.79 with Next year EPS estimates of 0.14. For the next quarter, that number is 0.02. This implies an EPS growth rate of 92.10% for this year and 39.00% for next year.

Float and Shares Shorts:

At present, 290.13 million FRSH shares are outstanding with a float of 158.33 million shares on hand for trading. On May 14, 2023, short shares totaled 11.57 million, which was 3.97% higher than short shares on Apr 13, 2023. In addition to Mr. Rathna Girish Mathrubootham as the firm’s Co-Founder, CEO & Chairman, Mr. Dennis M. Woodside serves as its Pres & Director.

Institutional Ownership:

Through their ownership of 77.26% of FRSH’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 35.51% of FRSH, in contrast to 24.11% held by mutual funds. Shares owned by individuals account for 20.87%. As the largest shareholder in FRSH with 9.09% of the stake, The Vanguard Group, Inc. holds 14,646,751 shares worth 14,646,751. A second-largest stockholder of FRSH, Ward Ferry Management Ltd., holds 12,871,086 shares, controlling over 7.99% of the firm’s shares. Champlain Investment Partners LLC is the third largest shareholder in FRSH, holding 5,928,625 shares or 3.68% stake. With a 3.06% stake in FRSH, the Vanguard Total Stock Market ETF is the largest stakeholder. A total of 4,921,197 shares are owned by the mutual fund manager. The Vanguard Small Cap Index Fund, which owns about 2.56% of FRSH stock, is the second-largest Mutual Fund holder. It holds 4,127,388 shares valued at 55.14 million. Advisors Inner Circle II – Champl holds 1.90% of the stake in FRSH, owning 3,055,000 shares worth 40.81 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2023, FRSH reported revenue of $121.43M and operating income of -$67.35M. The EBITDA in the recently reported quarter was -$64.55M and diluted EPS was -$0.24.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for FRSH since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With FRSH analysts setting a high price target of $25.00 and a low target of $14.00, the average target price over the next 12 months is $17.80. Based on these targets, FRSH could surge 73.13% to reach the target high and fall by -3.05% to reach the target low. Reaching the average price target will result in a growth of 23.27% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded FRSH stock several times over the past three months with 9 Buys and 9 Sells. In these transactions, 1,076,802 shares were bought while 62,685 shares were sold. The number of buy transactions has increased to 113 while that of sell transactions has risen to 26 over the past year. The total number of shares bought during that period was 14,590,143 while 4,678,097 shares were sold.

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