Value
6.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 5.2 |
| P/S | 7.3 |
| Fwd P/E | 6.8 |
| PEG | 9.4 |
| Analyst target | 3.0 |
- ▸Forward P/E: 18.5x
- ▸PEG: 0.61
FRSH · Why this verdict
Why Freshworks (FRSH) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.4/10
ConfidenceMEDIUM
MacroRISK_OFF
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quarterly revenue reached $237.4M versus $204.7M a year earlier, about 16% growth, with seven consecutive quarters of sequential increases. Revenue quarters | Year-over-year revenue growth stays above 12% through the next four quarters. | →Stable |
| CounterGrowth scores only 6.5 out of 10 and mature seat-based software faces pricing pressure from AI-native competitors. | ||
Free cash flow is 141% of net income, the Piotroski F-Score is 9/9 and the business has a wide economic moat with a Rule of 40 score of 45. Quality breakdown | Free cash flow stays above 100% of net income and the Rule of 40 stays above 40. | →Stable |
| CounterSoftware free cash flow is often inflated by stock-based compensation and deferred revenue, so cash conversion above 100% can flatter true profitability. | ||
At $15.49 the stock trades 17.0% above the $12.86 analyst target, so the sell side sees no remaining upside. Upside pct | Analyst targets are raised above the current price after the November earnings. | ↓Deteriorating |
| CounterThe price is within 0.1% of its 52-week high with accumulation on rising volume, suggesting the market is ahead of stale targets. | ||
Insiders sold about $744,489 of stock across 2 sales in the last 90 days with no purchases. Insider | Insider selling slows to below $250,000 per quarter. | →Stable |
| CounterTwo sales is a small sample and typical of scheduled executive diversification, not necessarily a negative view. | ||
The stock is overbought with an RSI of 78 and sits 0.1% from its 52-week high, with a forward P/E of 18.7x. Momentum breakdown | The stock consolidates without a drop of more than 10% as earnings arrive in 10 days. | ↓Deteriorating |
| CounterA stretched RSI near a 52-week high ahead of earnings sets up a sharp pullback on even a modest miss, with a 15% downside to the stop level. | ||
Quarterly revenue reached $237.4M versus $204.7M a year earlier, about 16% growth, with seven consecutive quarters of sequential increases.
→StableRevenue quarters
- Expectation
- Year-over-year revenue growth stays above 12% through the next four quarters.
CounterGrowth scores only 6.5 out of 10 and mature seat-based software faces pricing pressure from AI-native competitors.
Free cash flow is 141% of net income, the Piotroski F-Score is 9/9 and the business has a wide economic moat with a Rule of 40 score of 45.
→StableQuality breakdown
- Expectation
- Free cash flow stays above 100% of net income and the Rule of 40 stays above 40.
CounterSoftware free cash flow is often inflated by stock-based compensation and deferred revenue, so cash conversion above 100% can flatter true profitability.
At $15.49 the stock trades 17.0% above the $12.86 analyst target, so the sell side sees no remaining upside.
↓DeterioratingUpside pct
- Expectation
- Analyst targets are raised above the current price after the November earnings.
CounterThe price is within 0.1% of its 52-week high with accumulation on rising volume, suggesting the market is ahead of stale targets.
Insiders sold about $744,489 of stock across 2 sales in the last 90 days with no purchases.
→StableInsider
- Expectation
- Insider selling slows to below $250,000 per quarter.
CounterTwo sales is a small sample and typical of scheduled executive diversification, not necessarily a negative view.
The stock is overbought with an RSI of 78 and sits 0.1% from its 52-week high, with a forward P/E of 18.7x.
↓DeterioratingMomentum breakdown
- Expectation
- The stock consolidates without a drop of more than 10% as earnings arrive in 10 days.
CounterA stretched RSI near a 52-week high ahead of earnings sets up a sharp pullback on even a modest miss, with a 15% downside to the stop level.
Per-dimension breakdown
Quality
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.6 |
| ROA | 1.1 |
| Gross margin | 10.0 |
| Op margin | 2.2 |
| Net margin | 10.0 |
| Current ratio | 6.1 |
| FCF quality | 9.7 |
| Moat | 8.4 |
| Rule of 40 | 7.6 |
| Piotroski F | 10.0 |
- ▸Strong margins: 20%
- ▸Excellent cash conversion: 141% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
6.5/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 6.5 |
Momentum
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 7.1 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.5 |
| Analyst rating | 7.2 |
| Price target | 5.2 |
- ▸LLM news sentiment: +0.50 (n=3)
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $744,489 (0.019% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.5 |
| quality rank | 7.4 |
| growth rank | 5.7 |
- ▸Conservative debt levels
Technical
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.0 |
| support resistance | 3.3 |
| 52w position | 8.8 |
| gap | 6.0 |
Risk (lower is worse)
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.6 |
| days to cover | 6.6 |
| volatility | 2.2 |
| put call | 9.4 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 7.6 |
| debt equity | 9.8 |
- ▸High IV: 81%
- ▸Above max pain $2
Catalyst
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 7.0 |
- ▸Strong earnings: 3B/0M
- ▸Earnings in 5 days
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- MOMENTUM:4.5>=4.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.60
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- ASYMMETRY:-0.9=NEGATIVE
- 8K_SERIOUS:2.05
- EARNINGS_PROXIMITY:5d<=7d
Warning (1)
- MOMENTUM:4.5<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.91
Upside
-11.8%
Downside
13.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 57, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $4.0B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:4.5>=4.5. Top dim: Catalyst at 7.4; weakest: Momentum at 4.5. No conviction either direction.
The strongest dimensions are Catalyst at 7.4, Insider at 7.3, and Quality at 7.2; the weakest are Momentum at 4.5, Risk (lower is worse) at 5.3, and Technical at 5.5. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.91 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Excellent Cash Conversion
Trip ifFree cash flow falls below 80% of net income from the current 141%.
- P2Steady Double Digit Revenue Growth
Trip ifYear-over-year revenue growth falls below 10% for 2 consecutive quarters.
- P3Price Above Analyst Target
Trip ifAnalyst target rises above $17.04, at least 10% above the current $15.49 price.
- P4Insider Selling Pressure
Trip ifInsider sales total more than $1.5M over 90 days from the current $744,489.
- P5Overbought Near High
Trip ifPrice falls more than 10% from $15.49 within 30 days of earnings.