What happened
Shares of Freshworks (FRSH 1.47%) sank 17.2% in January, according to data from S&P Global Market Intelligence. The software stock fell amid intense sell-offs for the broader market and set a new 52-week low in the month's trading.
The tech-heavy Nasdaq Composite index fell 9% across January's trading and entered into correction territory, and many software companies saw even steeper valuation slides. Growth-dependent software stocks have generally been under pressure lately, and the pullback for Freshworks' share price last month came on the heels of a 25.4% sell-off for the stock in December.
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So what
There doesn't appear to have been any business-specific news that contributed to Freshworks stock's big sell-off last month, but investors still a had a multitude of rising risk factors to consider. In addition to the threat of possible conflict between Russia and Ukraine, the market had to weigh the impact of macroeconomic catalysts including rising interest rates, high inflation, and rising Treasury-bond yields. If that weren't enough, earnings reports from Peloton, Netflix, and Tesla arrived with worrying guidance.
In the absence of any major positive news to push the stock higher, Freshworks was caught up in the stock market's dramatic pullback last month. The company's share price is now down roughly 56% from market close on the day of its initial public offering last September.
Now what
Freshworks stock has continued to lose ground early in February's trading. The company's share price is down roughly 7.5% in the month amid ongoing turbulence in the broader market.
It's been an especially lumpy earnings season for Big Tech companies, and Meta Platforms' Q4 results arrived with performance and guidance that triggered sell-offs across the market and sent Freshworks shares lower.
The company is scheduled to publish its own fourth-quarter results and host a conference call after the market closes on Feb. 10. Management is guiding for sales between $99 million and $101 million and a non-GAAP (adjusted) loss per share between $0.05 and $0.07. For the full-year period, the company is targeting sales between $364.5 million and $366.5 million and an adjusted loss per share between $0.20 and $0.22.
Freshworks now has a market capitalization of roughly $5.8 billion and is valued at 12 times this year's expected sales.
