3 Software Stocks Wall Street Predicts Will Rally More Than 70% in 2022

NASDAQ: FRSH | Freshworks Inc. Cl A News, Ratings, and Charts

FRSH – The increasing automation of business processes and growing investments in advanced technologies like blockchain and artificial intelligence (AI) across businesses are expected to bolster the software industry’s growth. Against this backdrop, Wall Street predicts the stocks of software companies Freshworks (FRSH), Samsara (IOT), and ironSource Ltd. (IS) will rally more than 70% in the near term. So, read on.

The increasing use of data-oriented solutions and the increased automation of business processes across almost every industry is driving the software market’s growth. Furthermore, the COVID-19 pandemic and the institutionalization of  hybrid working models have fostered growing demand for cloud-based software solutions to enhance flexibility and mobility, thus propelling the industry’s growth.

The industry is expected to benefit as businesses emphasize investing in innovative technologies like blockchain, artificial intelligence, and machine learning to bolster their market competitiveness. The global business software and services market was valued at $429.59 billion in 2021 and is expected to expand at an 11.7%  CAGR  from 2022 to 2030.

Given this industry’s promising prospects, Wall Street analysts expect software stocks Freshworks Inc. (FRSH), Samsara Inc. (IOT), and ironSource Ltd. (IS) to rally more than 70% in the near term.

Click here to check out our Software Industry Report for 2022

Freshworks Inc. (FRSH)

San Mateo, Calif.-based FRSH is a software development company that provides modern software-as-a-service (SaaS) products worldwide.

In April 2022, FRSH announced the expansion of its partnership with Device42, an asset management market leader, to provide enterprise-grade service management capabilities to FRSH’s customers. “Freshservice combined with Device42 means an ITSM solution to enable IT services and operations teams to keep business-critical services always on,” said Prakash Ramumurthy, Chief Product Officer at Freshworks.

In March, the company announced that its customer Collinson Group, a U.K. travel experiences and insurance company, will use FRSH’s services to modernize its customer experience to adapt to the fast-changing business and travel requirements post-pandemic. This move should prove to be strategically beneficial for the company.

FRSH’s revenue increased 44.5% from the prior-year quarter to $105.48 million in its fiscal fourth quarter, ended Dec. 31, 2021. Its gross profit for the quarter came in at $85.08 million, reflecting a 47.9% increase year-over-year, while its cash, cash equivalents, and restricted cash balance stood at $747.86 million, up 660.6% year-over-year.

Analysts expect FRSH’s revenue for its fiscal year ending Dec.31, 2022 to come in at $490.04 million, indicating a 32.1% increase year-over-year. The company’s EPS for the same period represents 0.5% year-over-year growth.

FRSH has gained 10.8% in price over the past month to close the last trading session at $19.07.

Among the 10 Wall Street analysts that have rated FRSH, eight rated it Buy, and two rated it Hold. The 12-month median price target of $33.00 indicates a 71.6% potential upside. The price targets range from a low of $24.00 to a high of $41.00.

Samsara Inc. (IOT)

IOT in San Francisco provides Connected Operations Cloud, an end-to-end solution that enables businesses to harness IoT (Internet of Things) data to develop actionable business insights and improve operations.

This month IOT announced the launch of its Tag Smart Collection to solve the pain point of lost luggage for travelers. Tag Smart combines with the Apple AirTag and helps people track their suitcase using the Find My app on their iPhone. This should reduce traveling setbacks and be a significant addition to the company’s offerings.

The company also announced the expansion of the JDLink integration with John Deere to digitize farming operations and provide enhanced features that help support vehicles enhance farming operations. This move demonstrates IOT’s advancement in the agriculture industry.

IOT’s revenue increased 65.6% year-over-year to $125.75 million in its fiscal fourth quarter, ended Jan. 29, 2022, while its gross profit grew 59.1% from its year-ago value to $87.05 million.

The Street expects IOT’s EPS for its fiscal year ending Jan. 31, 2023, to improve 32.7% year-over-year. The $575.62 million consensus revenue estimate for the same period represents 34.4% year-over-year growth.

IOT’s stock gained 6% in price intraday to close the last trading session at $14.34.

All the seven Wall Street analysts that have rated IOT rated it Buy. The 12-month median price target of $27.33 indicates a potential 91.4% upside. The price targets range from a low of $25.00 to a high of $30.00.

ironSource Ltd. (IS)

Headquartered in Tel Aviv-Yafo, Israel, IS operates as a business platform for app developers and telecom operators in Israel and internationally. The company provides the Sonic solution suite that helps developers to launch, monetize, and scale their apps and games.

On April 13, IS announced the expansion of its cross-channel marketing software with the help of Luna Ads, which would allow marketers to create, manage and optimize better campaigns on Apple Search Ads. The company expects this to support its global expansion.

Last month, IS announced its Marketability testing tool for mobile gaming apps, designed to give the developer clarity on in which titles to invest and launch. It is the first tool in the market to address the decision-making element and thus should be in demand.

For its fiscal fourth quarter, ended Dec. 31, 2021, IS’ revenue increased 46.1% year-over-year to $158.27 million. Its gross profit grew 46.9% from its  year-ago value to $133.71 million, while the income from continuing operations stood at $20.81 million, reflecting a 20.1% increase year-over-year.

The  $0.05 consensus EPS estimate  for its fiscal second quarter, ending June 30, 2022, represents a 21.7% improvement year-over-year. And the $194.12 million consensus revenue estimate for the same quarter represents a 43.8% increase from the same period last year.

The stock has gained 1.1% in price intraday to close the last trading session at $4.74.

Among the nine Wall Street analysts that have rated IS, eight rated it Buy, and one rated it Hold. The 12-month median price target of $11.06 indicates a 132.4% potential upside. The price targets range from a low of $9.00 to a high of $14.00.

Click here to check out our Software Industry Report for 2022


FRSH shares were trading at $19.18 per share on Thursday morning, up $0.11 (+0.58%). Year-to-date, FRSH has declined -26.96%, versus a -6.54% rise in the benchmark S&P 500 index during the same period.


About the Author: Komal Bhattar


Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
FRSHGet RatingGet RatingGet Rating
IOTGet RatingGet RatingGet Rating
ISGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Recession is Here...Watch Out Below!

More and more it looks like recession is here. This includes a dramatic decline for ISM Manufacturing discovered this morning. As you likely know, most economist call manufacturing the "canary in the coal mine" for the US economy as it often shows weakness before other areas. In fact, GDP Now from the Atlanta Fed reads it loud and clear with a negative revision for the US economy down to -2.1% for Q2. Ouch! We are going to discuss these new economic facts...what it means for the stock market outlook...and an interesting view on why the S&P 500 (SPY) does not decline in orderly fashion. All that and more is coming your way in this week's commentary…

:  |  News, Ratings, and Charts

4 Ideal Stocks to Add to Your Portfolio in July

While sluggish consumer spending data led to the stock market ending the last trading session of June in the red, a moderate inflation forecast is nurturing hopes over the economy to avoid a recession. Therefore, investors might consider buying quality stocks ARC Document Solutions (ARC), Core Molding Technologies (CMT), DLH Holdings (DLHC), and Friedman Industries (FRD) at their current low price levels to benefit from their big rebounds. Read more…

:  |  News, Ratings, and Charts

Stocks to Fall MUCH FURTHER this Bear Market Cycle

Spoiler alert...the bear market is not over. Unfortunately history shows that the S&P 500 (SPY) has much further to fall to squeeze out excess valuation. That is just a natural part of the bear market process that is properly explained in this timely market commentary. More importantly, this commentary provides a strategy on how to profit in the days and weeks ahead as the market finds its way to bottom. Read on below for more...

:  |  News, Ratings, and Charts

Wall Street Analysts Predict More Than 160% Upside in These Stocks

The high global inflation and hawkish federal reserve are leading to heightened volatility in the market. However, despite the market uncertainties, Wall Street analysts see a more than 160% upside potential in IonQ (IONQ) and Rigetti Computing (RGTI). Thus, these stocks could be ideal additions to your watchlist. Keep reading…

:  |  News, Ratings, and Charts

Stocks to Fall MUCH FURTHER this Bear Market Cycle

Spoiler alert...the bear market is not over. Unfortunately history shows that the S&P 500 (SPY) has much further to fall to squeeze out excess valuation. That is just a natural part of the bear market process that is properly explained in this timely market commentary. More importantly, this commentary provides a strategy on how to profit in the days and weeks ahead as the market finds its way to bottom. Read on below for more...

Read More Stories

More Freshworks Inc. Cl A (FRSH) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All FRSH News