Freshworks (NASDAQ:FRSH) Stock Gets Downgrade from Wolfe Research

Key Points

• Wolfe Research downgraded Freshworks from “outperform” to “peer perform.” Across analysts, the stock has a “Moderate Buy” consensus rating and an average price target of $15.46.
• Freshworks reported quarterly EPS of $0.22, above the $0.18 consensus, while revenue rose 14% year over year to $245.43 million, slightly ahead of estimates.
• Shares fell $0.97 to $13.18 in Wednesday midday trading.

Freshworks (NASDAQ:FRSH - Get Free Report) was downgraded by equities researchers at Wolfe Research from an "outperform" rating to a "peer perform" rating in a report released on Wednesday, MarketBeat.com reports.

FRSH has been the topic of a number of other research reports. Wells Fargo & Company increased their price target on Freshworks from $10.00 to $15.00 and gave the stock an "equal weight" rating in a research report on Wednesday, October 28th. Oppenheimer reaffirmed a "market perform" rating on shares of Freshworks in a report on Wednesday. Wall Street Zen upgraded Freshworks from a "hold" rating to a "buy" rating in a research report on Saturday, August 8th. Guggenheim initiated coverage on Freshworks in a research report on Wednesday, July 22nd. They set a "buy" rating and a $25.00 target price for the company. Finally, Zacks Research lowered Freshworks from a "strong-buy" rating to a "hold" rating in a report on Friday, July 10th. One investment analyst has rated the stock with a Strong Buy rating, seven have issued a Buy rating and nine have given a Hold rating to the company. Based on data from MarketBeat.com, Freshworks currently has an average rating of "Moderate Buy" and an average price target of $15.46.

Freshworks Price Performance

Freshworks stock traded down $0.97 during midday trading on Wednesday, hitting $13.18. The company's stock had a trading volume of 5,042,691 shares, compared to its average volume of 9,732,667. Freshworks has a 1-year low of $6.79 and a 1-year high of $15.51. The company has a 50-day moving average price of $13.47 and a two-hundred day moving average price of $10.48. The company has a market cap of $3.44 billion, a price-to-earnings ratio of 20.63, a PEG ratio of 9.47 and a beta of 0.80.

Freshworks (NASDAQ:FRSH - Get Free Report) last announced its earnings results on Tuesday, November 3rd. The company reported $0.22 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.18 by $0.04. Freshworks had a net margin of 20.49% and a return on equity of 5.52%. The firm had revenue of $245.43 million for the quarter, compared to analyst estimates of $245.06 million. During the same quarter in the prior year, the business posted $0.16 EPS. The business's revenue was up 14.1% compared to the same quarter last year. Sell-side analysts forecast that Freshworks will post 0.05 EPS for the current year.

Insider Buying and Selling at Freshworks

In other news, CAO Philippa Lawrence sold 3,492 shares of Freshworks stock in a transaction 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 transaction, the chief accounting officer owned 379,639 shares in the company, valued at approximately $4,927,714.22. This trade represents a 0.91% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. 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. Corporate insiders own 8.54% of the company's stock.

Institutional Trading of Freshworks

Large investors have recently bought and sold shares of the business. Nykredit A S bought a new position in shares of Freshworks in the 2nd quarter valued at $28,000. Provenance Wealth Advisors LLC bought a new stake in shares of Freshworks during the third quarter worth about $28,000. Root Financial Partners LLC acquired a new position in shares of Freshworks during the third quarter worth $29,000. Meeder Asset Management Inc. lifted its holdings in shares of Freshworks by 164.0% during the first quarter. Meeder Asset Management Inc. now owns 6,156 shares of the company's stock worth $49,000 after purchasing an additional 3,824 shares during the period. Finally, Summit Securities Group LLC lifted its holdings in shares of Freshworks by 186.3% during the first quarter. Summit Securities Group LLC now owns 6,043 shares of the company's stock worth $49,000 after purchasing an additional 3,932 shares during the period. 75.58% of the stock is owned by institutional investors and hedge funds.

Freshworks News Roundup

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

Freshworks Company Profile

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.

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