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Is Freshworks (FRSH) A Bargain On Its Vanquis Bank Win?

Simply Wall St · 1d ago

Freshworks (FRSH) is back in focus after Vanquis Bank selected its Freshservice platform to support the next phase of the bank’s Gateway digital transformation programme, highlighting investor interest in large enterprise adoption.

See our latest analysis for Freshworks.

The Vanquis win arrives as Freshworks trades at US$10.36, with recent momentum reflected in a 30 day share price return of 9.69% and a 90 day share price return of 32.48%. This contrasts with a one year total shareholder return that is down 26.63% and a three year total shareholder return that is down 41.20%, suggesting recent optimism has yet to offset earlier weakness.

If this kind of AI driven adoption story interests you, it may be worth widening your watchlist to include 63 profitable AI stocks that aren't just burning cash

For Freshworks, a double digit rebound in recent months sits against a longer stretch of weak shareholder returns, raising a simple question for investors heading into valuation analysis: is the market now reconsidering the business, or just sentiment?

Most Popular Narrative: 11.8% Undervalued

Freshworks is currently trading at $10.36, compared with a most popular narrative fair value of $11.75. This frames the recent share price rebound against a still cautious longer term earnings outlook.

The rapid adoption of AI-powered features (such as Copilot and Agentic AI) across both new and existing Freshworks customers is outpacing internal expectations, with over 5,000 paying customers and high attach rates in large deals; as AI monetization expands and early-access Agentic products move to paid solutions, management expects this to materially boost revenue growth and average selling prices in 2026 and beyond.

Read the complete narrative.

Want to understand why an earnings decline view still supports a higher fair value for Freshworks? Revenue mix, margin resets and future multiples all sit at the core of this narrative.

Result: Fair Value of $11.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, investors still need to weigh risks such as tougher competition from larger AI and SaaS providers, as well as pressure on margins from higher sales and marketing spend.

Find out about the key risks to this Freshworks narrative.

Next Steps

With Freshworks presenting both clear risks and potential rewards, do not just rely on headline narratives; use the detailed breakdown of 3 key rewards and 2 important warning signs

Looking for more investment ideas beyond Freshworks?

Do not stop at Freshworks when there are other stocks worth your attention; use the Simply Wall St Screener to surface focused ideas that match your style.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.