Freshworks (NASDAQ:FRSH) Shares Gap Down Following Analyst Downgrade

Freshworks Inc. (NASDAQ:FRSH) gapped down before the market opened on Wednesday after Wolfe Research downgraded the stock from an outperform rating to a peer perform rating. The stock had previously closed at $14.15, but opened at $12.87. Freshworks shares last traded at $13.67, with a volume of 912,358 shares.

Several other research analysts have also weighed in on the company. Wall Street Zen upgraded Freshworks from a “hold” rating to a “buy” rating in a research report on Saturday, August 8th. Cantor Fitzgerald lifted their target price on Freshworks from $15.00 to $20.00 and gave the company an “overweight” rating in a research report on Wednesday. Zacks Research lowered Freshworks from a “strong-buy” rating to a “hold” rating in a research note on Friday, July 10th. Guggenheim initiated coverage on Freshworks in a report on Wednesday, July 22nd. They set a “buy” rating and a $25.00 price target for the company. Finally, Wells Fargo & Company raised their price objective on Freshworks from $10.00 to $15.00 and gave the stock an “equal weight” rating in a research report on Wednesday, October 28th. One analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating and nine have given a Hold rating to the company. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus target price of $15.46.

Insiders Place Their Bets

In other Freshworks news, CAO Philippa Lawrence sold 3,492 shares of the business’s stock in a transaction that occurred on Monday, October 5th. The stock was sold at an average price of $12.98, for a total value of $45,326.16. Following the sale, the chief accounting officer owned 379,639 shares of the company’s stock, valued at $4,927,714.22. The trade was a 0.91% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Company insiders own 8.54% of the company’s stock.

Key Freshworks News

Here are the key news stories impacting Freshworks this week:

• Positive Sentiment: Analysts raised their targets. Cantor Fitzgerald lifted its target to $20 and kept an Overweight rating; Piper Sandler raised its target to $15 while maintaining Neutral. Cantor Fitzgerald ratings Piper Sandler ratings
• Positive Sentiment: Profitability and cash generation stood out. Freshworks reported $0.22 in quarterly earnings per share, topping the $0.18 consensus, and record adjusted free cash flow of $73.9 million, up 29% year over year. It also reported GAAP net income of $18.3 million and its ninth consecutive quarter meeting the Rule of 40. Freshworks Q3 results
• Positive Sentiment: Management gave full-year targets. Freshworks expects 2026 revenue of $965 million–$966 million and is targeting more than $0.94 in adjusted free cash flow per share. 2026 outlook
• Neutral Sentiment: Revenue was $245.4 million, up 14% year over year and just above estimates of $245.06 million. The modest beat may have offered limited upside surprise. Q3 earnings and revenue
• Negative Sentiment: Shares fell after the report. Despite the earnings beat, coverage noted that the stock dropped, suggesting results or the outlook may not have cleared investor expectations. Freshworks shares after Q3 results

Institutional Investors Weigh In On Freshworks

Several institutional investors and hedge funds have recently modified their holdings of FRSH. Generation Investment Management LLP purchased a new position in Freshworks during the 2nd quarter valued at about $6,392,000. Assenagon Asset Management S.A. acquired a new position in Freshworks in the 2nd quarter valued at about $2,565,000. First Trust Advisors LP increased its stake in Freshworks by 209.6% during the first quarter. First Trust Advisors LP now owns 262,849 shares of the company’s stock worth $2,111,000 after purchasing an additional 177,963 shares during the period. Healthcare of Ontario Pension Plan Trust Fund increased its stake in Freshworks by 403.4% during the first quarter. Healthcare of Ontario Pension Plan Trust Fund now owns 1,444,124 shares of the company’s stock worth $11,596,000 after purchasing an additional 1,157,277 shares during the period. Finally, Principal Financial Group Inc. lifted its position in shares of Freshworks by 80.7% during the first quarter. Principal Financial Group Inc. now owns 765,475 shares of the company’s stock worth $6,147,000 after purchasing an additional 341,947 shares in the last quarter. Hedge funds and other institutional investors own 75.58% of the company’s stock.

Freshworks Stock Down 6.4%

The firm has a market cap of $3.46 billion, a price-to-earnings ratio of 20.70, a PEG ratio of 9.47 and a beta of 0.80. The company’s 50-day moving average price is $13.47 and its 200-day moving average price is $10.48.

Freshworks (NASDAQ:FRSH) last posted its quarterly earnings data on Tuesday, November 3rd. The company reported $0.22 EPS for the quarter, beating the consensus estimate of $0.18 by $0.04. The business had revenue of $245.43 million during the quarter, compared to analyst estimates of $245.06 million. Freshworks had a net margin of 20.49% and a return on equity of 5.52%. The business’s revenue for the quarter was up 14.1% compared to the same quarter last year. During the same quarter last year, the firm posted $0.16 earnings per share. On average, sell-side analysts predict that Freshworks Inc. will post 0.05 earnings per share for the current fiscal year.

About Freshworks

Freshworks Inc (NASDAQ:FRSH) develops cloud-based customer and employee engagement software for businesses of various sizes. Its products are designed to help organizations manage customer support, IT service operations, sales activities, and marketing workflows through user-friendly, artificial intelligence-enabled applications.

The company’s product portfolio includes Freshdesk for customer service and support, Freshservice for IT and enterprise service management, Freshsales for customer relationship management, and Freshmarketer for marketing automation and customer engagement.