Wolfe downgrades Freshworks on worsening retention trends - InvestingChannel

Wolfe downgrades Freshworks on worsening retention trends

Wolfe Research analyst Alex Zukin downgraded Freshworks to Peer Perform from Outperform with a fair value range of $12-$15 per share. The company has “numerous avenues for growth,” including a modernized platform to drive new logo wins across buying centers, but Freshworks has experienced material pressure throughout 2022 in the form of currency headwinds, deal cycle elongation, elevated churn and execution issues, all while producing little to no free cash flow, Zukin tells investors in a research note. The analyst believes the “deteriorating” macro environment will continue to drive worsening retention trends, decelerating billings growth, and revenue growth into the high-teens in fiscal 2023. As a result, he downgraded Freshworks to Peer Perform.

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