Freshworks ( NASDAQ: FRSH ) shares rose 1% in early trading on Tuesday as investment firm Cantor Fitzgerald started coverage on the business software company.
Analyst Brett Knoblauch initiated Freshworks ( FRSH ) with an overweight rating and a per-share price target of $18, noting it is a "one-stop-shop" for customer service, IT service management and sales and marketing automation tools.
"Our conversations with customers, partners, and resellers reinforce our view that FRSH has a superior product and is positioned to deliver robust growth over the long term," Knoblauch wrote in a note to clients.
"While we expect an uncertain macro environment to dampen growth rates over the medium term, FRSH has $1.1B in cash on its balance sheet and no debt, which we believe gives FRSH ample flexibility to further invest in its products, go-to-market operations, or pursue strategic M&A," Knoblauch added.
In addition to the balance sheet, favorable market dynamics, Knoblauch noted Freshworks ( FRSH ) is about to turn free cash flow positive, all while having a number of growth opportunities in front of it, while trading at a roughly in-line valuation to its peers, such as Hubspot ( HUBS ).
"Ultimately, we believe FRSH is in the early stages of its growth story, which we believe paves the way for meaningful [free cash flow] generation over the long term, making shares attractive at current levels," Knoblauch explained.
Earlier this month, investment firm Canaccord Genuity downgraded Freshworks ( FRSH ), citing worries over its valuation and slowing business metrics .
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Freshworks rises as Cantor Fitzgerald starts coverage with overweight rating