Freshworks Inc (FRSH) PT Lowered to $19 at Canaccord Genuity

Canaccord Genuity analyst David Hynes Jr. lowered the price target on Freshworks Inc (NASDAQ: FRSH) to $19.00 (from $23.00) while maintaining a Buy rating.

The analyst comments "Freshworks Q3 results hit the mark across the three key things that we wanted to see – durability in the 20%+ IT/EX growth story, which actually accelerated a bit sequentially, contribution from the firm’s Freddy AI products as they continue to scale and grow quickly (AI ARR has doubled year-over-year), and non-GAAP operating margins that exceeded expectations, which is driving FCF growth that’s notably faster than revenue growth. In terms of the numbers, Freshworks reported 15% cFX revenue growth, 21.0% non-GAAP operating margins (+520 bps versus guidance), and 26.6% adjusted FCF. From a segment level perspective, the firm’s IT/EX business ended the quarter with >$480M in ARR, which is up 23% on a cFX organic basis, an acceleration from last quarter – this segment now makes up 55% of total ARR. The balance comes from the CX business, which ended the quarter at >$390M in ARR, up 7% on a cFX basis, largely consistent with the prior two quarters."

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