12 Best Nasdaq Stocks Under $20 to Buy Now

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8. Freshworks Inc. (NASDAQ:FRSH)

Current market price: $14.35

Upside Potential: 53%

Number of Hedge Fund Holders: 41

Freshworks Inc. (NASDAQ:FRSH) provides AI service software designed to enhance customer and employee experiences. It offers a software-as-a-service platform that allows small and medium-sized businesses to support customers through email, phone, website, and social networks. The company provides multi-product support, a knowledge base, self-service portal, community forums, and various tools to leverage mainstream social media for customer support.

Freshworks Inc. (NASDAQ:FRSH) reported strong Q4 2024 results on February 11. Revenue for the quarter increased by 22% year-over-year to $195 million. Adjusted EPS rose by 75% to $0.14 due to the expansion in operating margin to 20.7% from 7.2% in the same quarter of the previous year. Buoyed by the strong results, the company CEO noted:

“Companies are leaving legacy vendors and coming to Freshworks for our uncomplicated, modern employee and customer experience service solutions.”

Following the results, Needham analyst Scott Berg raised the price target from $20 to $25 and reiterated a Buy rating on Freshworks Inc. (NASDAQ:FRSH). According to the analyst, the company delivered strong Q4 results, with Device42 (its IT asset management subsidiary) contributing to higher win rates. However, foreign exchange (FX) pressures slightly impacted revenue and led to fewer large customer additions. Despite this, overall customer growth reached a four-year high, driven by a surge in free-to-paid conversions, boosting monetization.

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