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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Freshworks Inc. (XNAS:FRSH) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FRSH
Name:
FRESHWORKS INC. (XNAS:FRSH)
Sector:
- 1386.00K
Industry:
Software�Application
CEO:
Total Employees:
4,600
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -107.62% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FRESHWORKS INC.(FRSH) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
13.3
One Month Price Target:
$13.41
Six Month Price Target :
$13.97
Likely Price in One Year's Time:
Ticker:
$14.65
Likely Trading Range Today Under (Normal Volatility)
$13.04
Price Upper limit ($) :
$13.46
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$11.78
This week:
$9.91
This month :
$6.52
Other Primary facts
Market Cap:
3.84B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
286.29M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.31%
-18.03%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$20.36
$17.27
$6.24
$9.33
Medium risk (<10%) entry points
Buy Call
Sell Call
$16.26
Buy Put:
Sell Put:
$15.60
$10.33
$11.00
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FRSH
Sharpe Ratio:
-7.37%
Comparison:
FRSH, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -865.01% lower than the industry
& is -423.52% lower than the market/S&P 500 average
Average Returns/Yield of
FRSH
Daily returns:
-0.39%
Weekly returns:
-1.93%
Monthly returns:
-7.74%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is -1034.08% below industry average
Classification:
FRSH, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.26
Statistical test of Returns:
FRSH has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
5.36%
Weekly Volatility:
12.00%
Monthly Volatility:
23.99%
Yearly Volatility:
83.11%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
-
-
Value at Risk Analysis (VaR)
Daily VaR:
-11.40%
Weekly VaR:
-25.50%
Monthly VaR:
-51.00%
How Much Can the price of
FRSH
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-50%
Worst case (decline):
>85%
This translates to price declining to:
$6.71
This translates to price declining to:
$2.00
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
FRSH is a 259.98% riskier investment compared to the market/S&P 500 & is 208.40% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 49.25% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FRSH
Beta in relation to market/S&P 500--1.51
Expected beta in 1 year's time:
-
Expected beta in 3 year's time:
-
Unlevered (debt free) Beta:
1.468
Beta in relation to Nasdaq (XNAS):
0.094
Beta in relation to all global stocks::
0.341
Beta Comparison & Analysis
Beta of competitors/peers::
-
-
Average Industry Beta:
1.335
Beta is 12.69% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
22.23%
Sustainable growth rate is -28.51% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-1.063
Alpha is 4401.51% above industry average alpha yield
Alpha is -6765% below the market average
Analysis of Cost of Capital of
FRSH
Equity cost of capital:
0.135
Equity cost of capital is 9.44% above industry mean WACC
Unlevered (without debt) cost of capital:
13.13%
Before-tax cost of debt:
2.96%
After-tax cost of debt:
2.34%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.34%
WACC is 45.93% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$1.36
Revenue growth rate per share of (3Y):
3.43
Annual revenue growth rate is -168.22% below industry average
EPS:
-
Expected Annual growth rate of EPS (3Y):
461.01%
Expected future EPS growth rate is 1585.33% higher than the Software�Application industry
Free cash flow (FCF) per share:
$0.03
-
-
Debt per share
$0.09
EBITDA per share
-$0.73
Valuation Analysis Today of
FRSH
P/E Ratio:
-
P/E Ratio of Competitors/Peers:
-
-
-
-
-
-
P/S (Price to Sales ratio):
9.77
Price to sales ratio is -14.83% below the industry mean
P/B (Price to book value ratio):
3.43
Price to free cash flow: 412.80
-
Net income growth rate (3Y):
-365.96%
Net income growth rate is -249.88% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
2.42%
Net debt to equity ratio:
-51.47%
Debt to assets ratio:
1.94%
Net debt to assets ratio:
-41.13%
Debt-to-asset ratio is -96.47% below industry average
Ability to repay debt:
Interest coverage ratio:
-223.45
Interest coverage ratio is -520.64% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.066
Statistical significance of correlation:
FRSH does not have a has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is -86.96% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
0.029
Covariance of price movement with the market:
0.046
Kurtosis
0.28
Returns are more concentrated around the mean (platykurtic), compared to a normal distribution
Skewness of returns:
-0.085
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
FRSH
Gross Profit Margin Ratio:
317%
Operating Profit Margin Ratio:
-63.41%
Operating profit margin is 230.94% higher than the industry
Net Profit Margin Ratio:
317%
Effective Tax Rate:
-4.95%
Effective tax rate is -118.77% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-20.95%
Return on equity (ROE) is 60.14% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-16.74%
Return on assets (ROA) is 335.76% higher than the industry
Financial Leverage:
1.0x
Current Ratio:
5.61
Current ratio is 87.26% above industry average
Cash Conversion Cycle (days):
23
Cash conversion cycle is -75.75% below industry average
The remaining useful life of property plant & equipment is: 2.8 years
Stock based compensation to net income ratio:
-20.03%
In-depth Efficiency Analysis
Revenue generated per employee:
84.7K
Each employee generates -75% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 45.2K
Each employee generates -521% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 50.6K
Each employee generates 190% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 0.3K
Each employee generates -96% less free cash flow than industry average revenue per employee
Assets/Capital per employee
19.8K
Each employee generates -96% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 73.97%
Growth rate in R&D investment/expenditure is 4738.40% higher than the industry
Competitors/Peer firms of
FRSH
-
-
-
-
-
-
-
-
-
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
389.73M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
80.50M
309.23M
132.98M
145.02M
423.39M
278.37M
-
556.37M
2.76M
931.00K
12.80M
- 208034.00K
- 247139.00K
- 232745.00K
- 221768.00K
10.98M
- 232745.00K
Statement of Cash Flow
Date:
Period:
2.97M
Differed Income Tax :
309.00K
Stock Based Compensation :
46.63M
Change in Working Capital :
- 6607.00K
Accounts Receivables:
3.16M
Other Working Capital:
8.64M
Other Non-Cash Items:
7.11M
Net Cash Provided by Operating Activities:
1.36M
Investments in PP&E:
- 1397.00K
Net Acquisitions:
-
Purchases of Investments:
- 151408.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
603.47M
594.33M
1.20B
48.48M
-
53.41M
1.30B
49.33M
6.18M
1.27M
-
5.86M
28.36M
90.99M
-
1.39B
3.80M
4.53M
5.38M
177.83M
45.53M
231.70M
26.93M
20.83M
47.77M
-
279.46M
3.00K
- 3320000.00K
- 4353.0K
4.44B
March 31, 2022 at 6:00:00 AM
636.87M
1.11B
1.39B
-
31.47M
- 571998.0K
128.49M
- 1327.00K
- 25646.00K
-
-
-
-
- 120029.00K
- 120029.00K
-
- 144320.00K
603.54M
747.86M
1.36M
- 2741.00K
- 1386.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
FRSH
2023
2024
2025
2026
2027
$10.99
$12.10
$13.32
$14.67
$16.15