Is FRSH a good stock to buy? We came across a bullish thesis on Freshworks Inc. on r/Valueinvesting by jrowe32. In this article, we will summarize the bulls’ thesis on FRSH. Freshworks Inc.’s share was trading at $9.39 as of June 10th. FRSH’s trailing and forward P/E were 15.28 and 15.15 respectively according to Yahoo Finance.
Freshworks Inc., a software development company, provides software-as-a-service products in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. FRSH is presented as a classic case where traditional Graham-style screening understates the underlying business quality, as it currently scores only 2/6 on Ben Graham’s criteria, largely due to lack of dividends, historical losses, and revenue still below the $1.5 billion threshold, yet the operating fundamentals and leadership transition suggest a stronger long-term story than the screen implies.
Read More: 15 AI Stocks That Are Quietly Making Investors Rich
Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential
The company benefits from strong unit economics with 85% gross margins, 21.9% net margins, and $221M in free cash flow, supported by a clean balance sheet with no meaningful debt and offshore operations across a 4,500-employee base. The P/B of 2.12x is often cited as a weakness under traditional frameworks, but in software it is less relevant given that value is driven by recurring revenue and customer relationships rather than physical assets.
Leadership is a key re-rating catalyst with CEO Dennis Woodside, formerly of Google and ex ServiceNow board member, bringing experience in scaling global sales organizations and enterprise SaaS models. He has exposure to ServiceNow’s scaling playbook, positioning Freshworks to potentially replicate a similar enterprise expansion trajectory. With $839M revenue below Graham’s $1.5B benchmark, successful execution could reframe its screening profile toward a higher-quality SaaS compounder.
Trading at $8.98, the market underappreciates the transition from a previously loss-making growth story into a cash-generative SaaS platform with improving fundamentals and multiple expansion. While competition in SMB software remains intense and churn risk persists, the combination of strong cash generation, leadership credibility, and structural SaaS margins supports a constructive outlook.
Previously, we covered a bullish thesis on ServiceNow (NOW) by Compounding Your Wealth in April 2025, which highlighted its enterprise workflow automation platform, strong AI-driven moat, and large recurring revenue base. NOW’s stock price has depreciated by approximately 31.32% (adjusted for stock split) since our coverage. jrowe32 shares a similar view but emphasizes FRSH’s margin expansion, leadership transition under Dennis Woodside, and re-rating potential despite its smaller revenue base.
Freshworks Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held FRSH at the end of the first quarter which was 41 in the previous quarter. While we acknowledge the risk and potential of FRSH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FRSH and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
