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

Freshworks Inc. (NASDAQ:FRSH)’s stock price gapped down before the market opened on Wednesday after Citizens Jmp lowered their price target on the stock from $27.00 to $16.00. The stock had previously closed at $8.73, but opened at $7.89. Citizens Jmp currently has a market outperform rating on the stock. Freshworks shares last traded at $7.28, with a volume of 6,711,618 shares trading hands.

FRSH has been the topic of a number of other research reports. BTIG Research assumed coverage on Freshworks in a research note on Tuesday, December 16th. They set a “neutral” rating on the stock. Oppenheimer set a $15.00 target price on shares of Freshworks in a research report on Wednesday. Cantor Fitzgerald cut their price target on shares of Freshworks from $15.00 to $12.00 and set an “overweight” rating on the stock in a research note on Wednesday. UBS Group reiterated a “buy” rating and set a $17.00 price objective on shares of Freshworks in a research note on Friday, November 14th. Finally, Canaccord Genuity Group set a $14.00 target price on Freshworks in a research report on Wednesday. Eight analysts have rated the stock with a Buy rating, nine have issued a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Hold” and an average price target of $15.71.

Insider Activity

In other news, insider Mika Yamamoto sold 15,012 shares of the company’s stock in a transaction dated Friday, December 5th. The stock was sold at an average price of $13.00, for a total value of $195,156.00. Following the sale, the insider owned 490,350 shares in the company, valued at $6,374,550. This represents a 2.97% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CAO Philippa Lawrence sold 5,846 shares of Freshworks stock in a transaction that occurred on Tuesday, December 2nd. The shares were sold at an average price of $12.06, for a total value of $70,502.76. Following the transaction, the chief accounting officer owned 392,711 shares of the company’s stock, valued at approximately $4,736,094.66. This represents a 1.47% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 22,267 shares of company stock worth $282,301 over the last ninety days. 11.17% of the stock is owned by insiders.

Key Headlines Impacting Freshworks

Here are the key news stories impacting Freshworks this week:

• Positive Sentiment: Q4 results beat estimates — Freshworks reported $222.7M in revenue (≈14% y/y) and $0.14 non‑GAAP EPS, exceeded the high end of revenue and non‑GAAP operating margin guidance, and showed strong cash flow and ARR momentum. Freshworks Reports Fourth Quarter and Full Year 2025 Results
• Positive Sentiment: AI-led growth & long‑term ARR target — Management is pushing AI and its EX/CX platform as the growth engine and is targeting $1.3B ARR by 2028, which supports upside if adoption continues. Freshworks targets $1.3B ARR by 2028
• Positive Sentiment: Analyst support remains — Needham reaffirmed its “buy” rating with a $15 PT, implying material upside from current levels and signaling some analysts still view the company as a recovery/AI play. Needham reaffirms buy (Benzinga)
• Neutral Sentiment: Guidance is mixed — Freshworks guided FY‑2026 revenue to $952–$960M (slightly above consensus) and Q1 revenue above estimates, which is constructive for growth, but the company set FY EPS at $0.55–$0.57 (below the street). The revenue beat vs. the EPS shortfall creates the mixed market reaction. Freshworks Reports Fourth Quarter and Full Year 2025 Results
• Neutral Sentiment: Operational positives: product launches and the FireHydrant acquisition bolster ITSM/service offerings and could help cross‑sell. These are supportive but longer‑dated catalysts. Freshworks press release (GlobeNewswire)
• Negative Sentiment: Analyst pullback on valuation — Cantor Fitzgerald cut its price target from $15 to $12 (still “overweight”), signaling trimmed near‑term expectations and adding downward pressure. Cantor Fitzgerald lowers PT to $12 (Benzinga)
• Negative Sentiment: Market reaction to guidance — Some coverage notes shares fell after the guidance/earnings update because FY EPS fell short of consensus despite the revenue beat; investors appear focused on profitability cadence and sustainability of AI gains. Freshworks shares drop as earnings guidance disappoints investors (Investing.com)
• Negative Sentiment: One‑time accounting items cloud GAAP results — Q4 GAAP net income was boosted by a large tax benefit (valuation allowance release), so investors should focus on non‑GAAP metrics and recurring profitability. Freshworks Q4 release (GlobeNewswire)

Hedge Funds Weigh In On Freshworks

Several institutional investors have recently made changes to their positions in the company. BNP PARIBAS ASSET MANAGEMENT Holding S.A. purchased a new stake in Freshworks during the second quarter worth $25,000. IFP Advisors Inc raised its position in shares of Freshworks by 954.9% in the fourth quarter. IFP Advisors Inc now owns 2,152 shares of the company’s stock worth $26,000 after acquiring an additional 1,948 shares during the period. Rothschild Investment LLC boosted its stake in shares of Freshworks by 560.0% during the 3rd quarter. Rothschild Investment LLC now owns 2,277 shares of the company’s stock worth $27,000 after acquiring an additional 1,932 shares in the last quarter. Meeder Asset Management Inc. acquired a new stake in shares of Freshworks during the 3rd quarter valued at about $27,000. Finally, SBI Securities Co. Ltd. grew its position in shares of Freshworks by 136.2% during the 3rd quarter. SBI Securities Co. Ltd. now owns 2,745 shares of the company’s stock valued at $32,000 after acquiring an additional 1,583 shares during the period. 75.58% of the stock is owned by hedge funds and other institutional investors.

Freshworks Stock Performance

The stock has a market cap of $2.04 billion, a PE ratio of -72.49 and a beta of 0.89. The company has a 50 day moving average of $11.67 and a two-hundred day moving average of $12.06.

Freshworks (NASDAQ:FRSH) last issued its quarterly earnings data on Tuesday, February 10th. The company reported $0.14 EPS for the quarter, beating the consensus estimate of $0.11 by $0.03. The company had revenue of $222.74 million for the quarter, compared to analyst estimates of $218.76 million. Freshworks had a negative return on equity of 0.37% and a negative net margin of 3.65%.Freshworks’s quarterly revenue was up 14.5% compared to the same quarter last year. During the same period last year, the company earned $0.14 earnings per share. Freshworks has set its Q1 2026 guidance at 0.100-0.120 EPS and its FY 2026 guidance at 0.550-0.570 EPS. As a group, equities research analysts anticipate that Freshworks Inc. will post -0.19 EPS for the current year.

About Freshworks

Freshworks, Inc is a global provider of cloud-based customer engagement software designed to help businesses streamline customer support, sales, marketing, and IT service operations. The company’s integrated suite of solutions enables organizations of all sizes to deliver seamless experiences across multiple channels, including email, chat, phone, and social media. Freshworks’ platform is built on modern, user-friendly interfaces and offers native automation, AI-powered insights, and analytics to improve efficiency and customer satisfaction.

The company’s flagship product, Freshdesk, serves as a helpdesk solution for customer support teams, while Freshservice addresses IT service management needs.