Head to Head Review: Blend Labs (NYSE:BLND) versus Freshworks (NASDAQ:FRSH)

Blend Labs (NYSE:BLND) and Freshworks (NASDAQ:FRSH) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Blend Labs and Freshworks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blend Labs	1	2	4	0	2.43
Freshworks	1	7	6	1	2.47

Blend Labs currently has a consensus price target of $3.32, suggesting a potential upside of 95.67%. Freshworks has a consensus price target of $12.18, suggesting a potential upside of 28.09%. Given Blend Labs’ higher probable upside, equities research analysts plainly believe Blend Labs is more favorable than Freshworks.

Risk & Volatility

Blend Labs has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, Freshworks has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Blend Labs	-3.72%	N/A	-1.63%
Freshworks	20.69%	4.27%	2.74%

Insider and Institutional Ownership

52.6% of Blend Labs shares are held by institutional investors. Comparatively, 75.6% of Freshworks shares are held by institutional investors. 40.3% of Blend Labs shares are held by insiders. Comparatively, 8.5% of Freshworks shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blend Labs	$123.51 million	3.32	-$6.80 million	($0.10)	-16.95
Freshworks	$838.81 million	3.13	$183.72 million	$0.62	15.34

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

Summary

Freshworks beats Blend Labs on 11 of the 15 factors compared between the two stocks.

About Blend Labs

Blend Labs, Inc. engages in the provision of cloud-based software platform solutions for financial services firms in the United States. It operates in two segments, Blend Platform and Title365. The company's Blend Builder Platform offers a suite of products that powers digital-first consumer journeys for mortgages, home equity loans and lines of credit, vehicle loans, personal loans, credit cards, and deposit accounts; and offers mortgage products to facilitate the homeownership journey for consumers comprising close, income verification for mortgage, homeowners' insurance, and realty. It also offers verification components to automate confirmation tasks that are needed to underwrite a loan or approve the opening of a new deposit account; decisioning components to reduce the need for human intervention by automatically applying business rules throughout an application workflow configured by a financial services firm; workflow intelligence components to manage data collection and automate tasks throughout the loan origination process; and marketplace components to enable consumers to shop for products and services presented at the precise moment of need during an application for a loan. In addition, the company, through its subsidiary, offers title search procedures for title insurance policies, escrow, and other closing and settlement services, as well as other trustee services; and provides professional and consulting services. It serves banks, credit unions, fintechs, and non-bank mortgage lenders. The company was incorporated in 2012 and is headquartered in San Francisco, California.

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.