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

Freshworks Inc. (NASDAQ:FRSH)’s share 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 changing hands.

Other research analysts have also recently issued reports about the company. Canaccord Genuity Group set a $14.00 target price on Freshworks in a research report on Wednesday. Piper Sandler decreased their price target on Freshworks from $12.00 to $10.00 and set a “neutral” rating on the stock in a report on Wednesday. Zacks Research downgraded shares of Freshworks from a “strong-buy” rating to a “hold” rating in a report on Monday, January 12th. Wall Street Zen lowered Freshworks from a “strong-buy” rating to a “buy” rating in a research note on Saturday, December 20th. Finally, Citigroup reissued an “outperform” rating on shares of Freshworks in a research note on Wednesday. Eight research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat, Freshworks currently has an average rating of “Hold” and an average price target of $15.71.

Insiders Place Their Bets

In other news, insider Mika Yamamoto sold 15,012 shares of the firm’s stock in a transaction on Friday, December 5th. The stock was sold at an average price of $13.00, for a total transaction of $195,156.00. Following the transaction, the insider owned 490,350 shares in the company, valued at approximately $6,374,550. This trade represents a 2.97% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is accessible through this link. Also, CAO Philippa Lawrence sold 5,846 shares of the company’s stock in a transaction dated Tuesday, December 2nd. The stock was sold at an average price of $12.06, for a total transaction of $70,502.76. Following the completion of the sale, the chief accounting officer directly owned 392,711 shares of the company’s stock, valued at approximately $4,736,094.66. This trade represents a 1.47% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 22,267 shares of company stock worth $282,301 in the last three months. Corporate insiders own 11.17% of the company’s stock.

Freshworks News Roundup

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)

Institutional Trading of Freshworks

A number of hedge funds have recently bought and sold shares of FRSH. Amundi increased its holdings in shares of Freshworks by 1.3% in the 1st quarter. Amundi now owns 80,074 shares of the company’s stock valued at $1,049,000 after acquiring an additional 1,040 shares during the period. Verdence Capital Advisors LLC grew its stake in Freshworks by 7.4% in the second quarter. Verdence Capital Advisors LLC now owns 15,547 shares of the company’s stock valued at $232,000 after purchasing an additional 1,070 shares during the last quarter. Vanguard Personalized Indexing Management LLC raised its holdings in Freshworks by 11.0% in the second quarter. Vanguard Personalized Indexing Management LLC now owns 11,694 shares of the company’s stock worth $174,000 after purchasing an additional 1,160 shares in the last quarter. Inceptionr LLC lifted its position in shares of Freshworks by 3.6% during the third quarter. Inceptionr LLC now owns 33,583 shares of the company’s stock valued at $395,000 after buying an additional 1,174 shares during the last quarter. Finally, Covestor Ltd boosted its holdings in shares of Freshworks by 25.0% in the 3rd quarter. Covestor Ltd now owns 7,393 shares of the company’s stock valued at $87,000 after buying an additional 1,479 shares in the last quarter. Hedge funds and other institutional investors own 75.58% of the company’s stock.

Freshworks Trading Down 17.0%

The stock has a market cap of $2.04 billion, a PE ratio of -72.49 and a beta of 0.89. The business’s 50-day moving average price is $11.67 and its 200-day moving average price is $12.06.

Freshworks (NASDAQ:FRSH) last announced its earnings results on Tuesday, February 10th. The company reported $0.14 earnings per share for the quarter, beating the consensus estimate of $0.11 by $0.03. The company had revenue of $222.74 million during the quarter, compared to the consensus estimate of $218.76 million. Freshworks had a negative net margin of 3.65% and a negative return on equity of 0.37%. Freshworks’s revenue was up 14.5% compared to the same quarter last year. During the same period last year, the firm 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, analysts predict that Freshworks Inc. will post -0.19 earnings per share for the current year.

Freshworks Company Profile

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.