UBS Reaffirms Buy on Freshworks (FRSH) as Attractive Valuation Trumps Execution Risks

Freshworks Inc. (NASDAQ:FRSH) is one of the best low-priced technology stocks to buy right now. The company remains under investor scrutiny as it lays out long-term financial targets. On September 12, UBS analyst Taylor McGinnis reiterated a Buy rating and $19 price target, following the company’s updated outlook.

The company now aims to surpass $1.2 billion in revenue by FY 2028, representing 15%-16% annual growth, alongside free cash flow of more than $340 million, or a margin of 28%-30%. These goals align with a “Rule of 45” growth-profitability metric.

UBS Reaffirms Buy on Freshworks (FRSH) as Attractive Valuation Trumps Execution Risks

McGinnis acknowledged that investors may remain cautious, citing headwinds from seat-based SaaS models, rising AI adoption, and the company’s history of missing a prior FY 2026 revenue target of $1 billion.

Reflecting this, UBS hasn’t adjusted its FY 2025 forecast but has tweaked medium-term expectations, lowering the free cash flow margin forecast to 30% from 32% while setting revenue growth at the low end of management’s range.

Despite the execution risk, McGinnis argued that Freshworks Inc. (NASDAQ:FRSH) shares trade at an appealing valuation for CY 2026, with an EV/Sales ratio of approximately 3x and an EV/FCF ratio of 13x. The analyst believes that if the company delivers sustained mid-teens growth, the stock could see meaningful upside. However, near-term investor sentiment may depend on Freshworks’ ability to prove consistency in achieving its targets.

Freshworks Inc. (NASDAQ:FRSH) is a SaaS provider of customer engagement and IT service management solutions, offering products such as Freshdesk, Freshservice, and Freshsales.

While we acknowledge the potential of FRSH to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than FRSH and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.