Critical Contrast: Phunware (NASDAQ:PHUN) vs. Freshworks (NASDAQ:FRSH)

Phunware (NASDAQ:PHUN) and Freshworks (NASDAQ:FRSH) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for Phunware and Freshworks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Phunware	0	1	1	0	2.50
Freshworks	1	5	8	0	2.50

Phunware presently has a consensus price target of $6.67, indicating a potential upside of 167.74%. Freshworks has a consensus price target of $20.29, indicating a potential upside of 57.99%. Given Phunware’s higher possible upside, equities analysts clearly believe Phunware is more favorable than Freshworks.

Earnings and Valuation

This table compares Phunware and Freshworks”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Phunware	$3.19 million	15.76	-$10.32 million	($0.65)	-3.83
Freshworks	$720.42 million	5.19	-$95.37 million	($0.18)	-71.33

Phunware has higher earnings, but lower revenue than Freshworks. Freshworks is trading at a lower price-to-earnings ratio than Phunware, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

7.6% of Phunware shares are owned by institutional investors. Comparatively, 75.6% of Freshworks shares are owned by institutional investors. 1.2% of Phunware shares are owned by company insiders. Comparatively, 11.2% of Freshworks shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Phunware has a beta of 2.51, indicating that its share price is 151% more volatile than the S&P 500. Comparatively, Freshworks has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Profitability

This table compares Phunware and Freshworks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Phunware	-510.83%	-12.99%	-11.77%
Freshworks	-7.02%	-2.56%	-1.78%

Summary

Freshworks beats Phunware on 8 of the 13 factors compared between the two stocks.

About Phunware

Phunware, Inc., together with its subsidiaries, provides integrated software platform that equips companies with the products, solutions, and services to engage, manage, and monetize their mobile application portfolios in the United States and internationally. The company's products and services include mobile software and application transaction solutions comprise integration of software development kit (SDK) licenses, which consists of analytics that offers data related to application use and engagement; content management that allows application administrators to create and manage app content in a cloud-based portal; alerts, notifications, and messaging, which enables brands to send messages; marketing automation that enables location-triggered messages and workflow; advertising; and location-based services, such as mapping, navigation, wayfinding, workflow, asset management, and policy enforcement. It is also involved in the integration of its SDK licenses into existing applications maintained by its customers, as well as custom application development and support services; and provision of cloud-based vertical solutions for healthcare, retail, sports, aviation, real estate, hospitality, education, and other applications, as well as application transactions, including re-occurring and one-time transactional media purchases for application discovery, user acquisition and audience building, audience engagement, and audience monetization. Phunware, Inc. was founded in 2009 and is headquartered in Austin, Texas.

About Freshworks

Freshworks Inc., a software development company, provides software-as-a-service products worldwide. It offers Freshworks Customer Service Suite, which provides automated, personalized self-service on various channels, including web, chat, mobile messaging, email, and social; Freshdesk, a ticketing-centric customer service solution; Freshsuccess, a customer success solution; and Freshchat that provides agents with a modern conversational experience to proactively engage customers across digital messaging channels. The company also provides Freshsales, an advanced and user-friendly sales automation solution; Freshmarketer, a marketing automation solution for businesses to redefine their marketing strategies; Freshsales Suite, which offers businesses a unified platform that facilitates cohesive engagement and detailed tracking of customers throughout their entire buying journey; Freshservice that offers virtual agents to help employees resolve issues, make requests, and answer questions without contacting the service desk; and Freshservice for Business Teams, which provides a unified employee service experience while ensuring the secure separation of departmental data. In addition, it offers Freshping to monitor website’s availability and get multichannel alerts if the website goes down; Freshstatus, which allows businesses to create a custom branded website status page for internal or external viewing to communicate website uptime and availability; and Freshsurvey to measure net promoter scores and other satisfaction metrics directly within Freshworks products. The company was formerly known as Freshdesk Inc. and changed its name to Freshworks Inc. in June 2017. Freshworks Inc. was incorporated in 2010 and is headquartered in San Mateo, California.