Freshworks (FRSH) Stock Analysis & Winston Score

Freshworks Inc., a software development company, provides modern software-as-a-service products worldwide. Freshworks Inc. was formerly known as Freshdesk Inc. and changed its name to Freshworks Inc. in June 2017. The company was incorporated in 2010 and is headquartered in San Mateo, California.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+16.5% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-295.3% YoY

YoY Growth Rate

Earnings declining

Insider Activity

18.3%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$548M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Freshworks is a rare growth stock that's already generating positive cash flow while growing at 16%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

84.8%

Premium pricing power — 84.8% gross margin

Operating Margin

-3.5%

Losing money on operations — -3.5%

ROCE

-0.8%

Weak — -0.8% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales YoY

+15.9%

Fast-growing sales (15.9% YoY)

EPS YoY

N/A

—

Data not available

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

142%

Turns 142% of profit into real cash

FCF Margin

27.0%

Converts sales into free cash efficiently (27.0%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

0.03

Conservative — low debt load (0.03)

Interest Cover

100.00x

—

Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

16.3x

no trend

Fair value — P/E 16.3

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

-0.2

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Not applicable for this business.

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