Tuesday, Needham reiterated its Buy rating on Freshworks Inc (NASDAQ:FRSH) with a steadfast $20.00 price target. The firm's analyst hosted two calls with Freshwork's partners recently, which revealed positive trends in their operations, particularly with Freshservice and Freddy.
The partners shared several insights, including strong feedback for Freddy with pricing not being a concern, and potential revenue uplift from licenses to Freddy, though building trust is crucial. Additionally, Freshservice is expected to see a price increase, with stricter discount policies. Despite Freshworks facing competition from NOW as the largest ITSM threat, the company remains competitive, especially in terms of pricing.
The analyst also noted that Device42 is considered a valuable addition to Freshworks' platform, likely to encourage upselling within larger, more established organizations. However, demand for Freshdesk has been slow year-to-date and is anticipated to continue at the same pace.
In conclusion, the analyst expressed confidence in Freshworks' ability to achieve mid-teens growth for the fiscal year 2025, driven by the strength of Freshservice, which is expected to counterbalance the sluggish performance of Freshdesk.
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