Freshworks (NASDAQ:FRSH) Shares Gap Down After 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 traded.

A number of other analysts have also issued reports on the company. Oppenheimer set a $15.00 price objective on Freshworks in a research note on Wednesday. Robert W. Baird set a $10.00 target price on Freshworks in a report on Wednesday. Wells Fargo & Company decreased their price target on Freshworks from $13.00 to $10.00 and set an “equal weight” rating on the stock in a research report on Wednesday. Needham & Company LLC reissued a “buy” rating and issued a $15.00 price target on shares of Freshworks in a report on Wednesday. Finally, Piper Sandler reduced their price objective on shares of Freshworks from $12.00 to $10.00 and set a “neutral” rating for the company in a research note on Wednesday. Eight research analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, Freshworks presently has an average rating of “Hold” and a consensus price target of $14.92.

Insider Activity

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

Key Stories Impacting Freshworks

Here are the key news stories impacting Freshworks this week:

• Positive Sentiment: Q4 beat and growth targets — Freshworks reported $0.14 EPS (vs. $0.11 est.) and $222.7M revenue, +14.5% YoY, and provided FY26/Q1 EPS guidance and a plan to reach $1.3B ARR by 2028 driven by EX platform and AI initiatives. Q4 2025 Earnings Call Highlights
• Positive Sentiment: Longer-term growth narrative — management reiterated ARR and AI/employee‑experience (EX) strategy that could support durable revenue expansion if execution continues. ARR target and AI strategy
• Positive Sentiment: Analyst support remains from some firms — Needham reaffirmed a buy with a $15 PT, signalling continued conviction among parts of the sell‑side despite recent cuts. Needham rating reaffirmed
• Positive Sentiment: Unusual options flow — a near‑doubling in call volume (4,648 calls) suggests traders are placing bullish/leveraged bets, which can precede volatility or a directional reversal if fundamentals hold.
• Neutral Sentiment: Short‑interest reporting anomaly — recent feeds show short interest at “0” with NaN changes, likely a data issue rather than a true indicator of short selling pressure.
• Neutral Sentiment: Elevated trading volume and volatility — intraday volume has been well above average, reflecting heavy positioning after the print and contributing to larger price moves.
• Negative Sentiment: Multiple price‑target cuts — Citigroup/JMP, Wells Fargo and Cantor lowered targets (examples: JMP $27→$16, Wells Fargo $13→$10, Cantor $15→$12), which compresses near‑term sentiment even if ratings remain mixed. Analyst price target cuts
• Negative Sentiment: Negative headlines and analyst re‑ratings — coverage describing the stock as “nosediving” and discussion of a shifting investment thesis has likely amplified selling pressure despite the quarter’s beat. Why Freshworks stock is nosediving

Institutional Trading of Freshworks

A number of hedge funds have recently made changes to their positions in the stock. Vanguard Group Inc. increased its stake in Freshworks by 3.5% in the fourth quarter. Vanguard Group Inc. now owns 27,240,469 shares of the company’s stock valued at $333,696,000 after acquiring an additional 922,549 shares during the last quarter. Eminence Capital LP lifted its stake in Freshworks by 39.4% during the second quarter. Eminence Capital LP now owns 7,334,601 shares of the company’s stock worth $109,359,000 after purchasing an additional 2,074,641 shares during the last quarter. Geode Capital Management LLC boosted its holdings in shares of Freshworks by 1.9% in the 4th quarter. Geode Capital Management LLC now owns 5,126,112 shares of the company’s stock worth $62,805,000 after purchasing an additional 95,720 shares in the last quarter. Wellington Management Group LLP increased its position in shares of Freshworks by 9.5% during the 3rd quarter. Wellington Management Group LLP now owns 4,906,157 shares of the company’s stock valued at $57,745,000 after purchasing an additional 424,866 shares during the last quarter. Finally, State Street Corp increased its position in shares of Freshworks by 2.1% during the 2nd quarter. State Street Corp now owns 4,850,487 shares of the company’s stock valued at $72,321,000 after purchasing an additional 101,132 shares during the last quarter. 75.58% of the stock is owned by institutional investors.

Freshworks Trading Down 3.6%

The stock has a fifty day moving average of $11.46 and a two-hundred day moving average of $11.99. The company has a market capitalization of $1.99 billion, a PE ratio of 11.00 and a beta of 0.89.

Freshworks (NASDAQ:FRSH) last issued its earnings results on Tuesday, February 10th. The company reported $0.14 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.11 by $0.03. The business had revenue of $222.74 million during the quarter, compared to analyst estimates of $218.76 million. Freshworks had a return on equity of 4.77% and a net margin of 21.90%.Freshworks’s revenue for the quarter was up 14.5% on a year-over-year basis. During the same quarter in the prior 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. Equities analysts forecast that Freshworks Inc. will post -0.19 EPS 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.