Freshworks: Why you should consider this company as a good buy.
Updated
Hello,
Today we shall be looking at Freshworks.
Freshworks, Inc. is a software development company, which engages in software-as-a-service products. Its products include Fresh desk, Fresh service, Fresh sales, Fresh marketer, and Fresh team. You can find more details on the company here
FRSH
TECHNICAL ANALYSIS- Checklist
This is as shown here:
Third Quarter 2024 Financial Summary Results
To follow on company news see FFRSH/NEWS
Our recommendation
Freshworks is strategically positioned for future growth. Over the past five years, its revenue has consistently increased, and the company is showing promising signs of nearing profitability. Achieving profitability will unlock additional cash flow, enabling Freshworks to reinvest in its operations and expand into untapped markets, fueling long-term growth.
From a technical analysis perspective, the stock has been consolidating in a sideways correction over the past two years, reflecting a period of accumulation. Recent momentum peaked in October 2024 and the stock rose over 50% in a few days, with clear indications of a potential breakout as investor interest intensifies. In the shorter timeframe, a minor correction appears currently underway, presenting an attractive entry point for new investors around the $15 level. With a medium-term target of $24, this setup offers a compelling opportunity for value-seeking investors looking to capitalize on Freshworks' upward trajectory.
Our recommendation is a strong buy on this stock at the current areas with a target of $24 per share.
Current price: $16.41 (11th December 2024)
Today we shall be looking at Freshworks.
Freshworks, Inc. is a software development company, which engages in software-as-a-service products. Its products include Fresh desk, Fresh service, Fresh sales, Fresh marketer, and Fresh team. You can find more details on the company here
FRSHTECHNICAL ANALYSIS- Checklist
- Structure drawing (Trend line drawing on past price chart data)- As shown in chart below
- Patterns identification (Naming patterns on past price chart data for future wave)- The price is correcting & forming a flat pattern
- Future indication (Reading indicator for future wave)- 0 crossover on MACD
- Future wave (Drawing on future price chart using future indication from indicator)- As shown in the chart below
- Future reversal point (Identifying trend reversal point on price chart using structure)- Target at the top as shown
This is as shown here:
Third Quarter 2024 Financial Summary Results
- Revenue: Total revenue was $186.6 million, representing growth of 22% compared to total revenue of $153.6 million in the third quarter of 2023, and 22% adjusting for constant currency.
- GAAP (Loss) from Operations: GAAP (loss) from operations was $(38.9) million, compared to $(38.7) million in the third quarter of 2023.
- GAAP Net (Loss) Per Share: GAAP basic and diluted net (loss) per share was $(0.10) based on 302.1 million weighted-average shares outstanding, compared to $(0.11) based on 294.1 million weighted-average shares outstanding in the third quarter of 2023.
- Non-GAAP Net Income Per Share: Non-GAAP diluted net income per share was $0.11 based on 302.7 million weighted-average shares outstanding, compared to $0.08 based on 302.6 million weighted-average shares outstanding in the third quarter of 2023.
- Net Cash Provided by Operating Activities: Net cash provided by operating activities was $42.3 million, compared to $23.9 million in the third quarter of 2023.
- Free Cash Flow: Free cash flow was $40.1 million, compared to $22.1 million in the third quarter of 2023.
- Cash, Cash Equivalents and Marketable Securities: Cash, cash equivalents, and marketable securities were $1.05 billion as of September 30, 2024.
To follow on company news see FFRSH/NEWS
Our recommendation
Freshworks is strategically positioned for future growth. Over the past five years, its revenue has consistently increased, and the company is showing promising signs of nearing profitability. Achieving profitability will unlock additional cash flow, enabling Freshworks to reinvest in its operations and expand into untapped markets, fueling long-term growth.
From a technical analysis perspective, the stock has been consolidating in a sideways correction over the past two years, reflecting a period of accumulation. Recent momentum peaked in October 2024 and the stock rose over 50% in a few days, with clear indications of a potential breakout as investor interest intensifies. In the shorter timeframe, a minor correction appears currently underway, presenting an attractive entry point for new investors around the $15 level. With a medium-term target of $24, this setup offers a compelling opportunity for value-seeking investors looking to capitalize on Freshworks' upward trajectory.
Our recommendation is a strong buy on this stock at the current areas with a target of $24 per share.
Current price: $16.41 (11th December 2024)
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Portfolio Manager
Dyer & Blair investment Bank, Kenya.
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Twitter: twitter.com/thesharkke
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Dyer & Blair investment Bank, Kenya.
Follow below handles for investment insights
Twitter: twitter.com/thesharkke
Free in-depth stock markets analysis Telegram channel: t.me/stocksfromtechnicaleye
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