Freshworks (NASDAQ:FRSH) Rating Lowered to Buy at Wall Street Zen

Key Points

• Freshworks has been downgraded from a "strong-buy" rating to a "buy" rating by Wall Street Zen, highlighting a shift in analyst sentiment.
• The company reported a quarterly earnings beat, posting $0.18 EPS against an estimate of $0.12 EPS, with revenue rising by 19.6% year-over-year.
• Currently, eight analysts rate Freshworks as a Buy, with an average price target of $20.29, reflecting optimism despite the recent downgrade.

Freshworks (NASDAQ:FRSH - Get Free Report) was downgraded by investment analysts at Wall Street Zen from a "strong-buy" rating to a "buy" rating in a report issued on Saturday.

Other equities research analysts have also issued reports about the stock. UBS Group reduced their target price on shares of Freshworks from $22.00 to $19.00 and set a "buy" rating for the company in a report on Friday, May 2nd. Morgan Stanley boosted their target price on Freshworks from $14.00 to $18.00 and gave the company an "equal weight" rating in a research report on Thursday, May 1st. Scotiabank increased their price objective on shares of Freshworks from $14.00 to $18.00 and gave the stock a "sector perform" rating in a research report on Wednesday, April 30th. JMP Securities reiterated a "market outperform" rating and set a $27.00 price objective on shares of Freshworks in a report on Wednesday, April 30th. Finally, Piper Sandler raised their target price on shares of Freshworks from $22.00 to $25.00 and gave the stock an "overweight" rating in a research report on Wednesday, July 30th. Eight investment analysts have rated the stock with a Buy rating, five have assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and an average price target of $20.29.

Freshworks Stock Performance

Shares of NASDAQ FRSH traded down $0.39 during mid-day trading on Friday, hitting $13.18. 3,250,837 shares of the stock traded hands, compared to its average volume of 3,766,554. The stock has a fifty day moving average price of $14.08 and a 200-day moving average price of $14.69. The company has a market cap of $3.84 billion, a price-to-earnings ratio of -73.22 and a beta of 0.94. Freshworks has a 52 week low of $10.81 and a 52 week high of $19.77.

Freshworks (NASDAQ:FRSH - Get Free Report) last announced its quarterly earnings results on Tuesday, July 29th. The company reported $0.18 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.12 by $0.06. Freshworks had a negative net margin of 7.02% and a negative return on equity of 2.56%. The company had revenue of $204.68 million for the quarter, compared to analysts' expectations of $198.85 million. During the same quarter in the previous year, the business posted $0.08 EPS. Freshworks's revenue was up 19.6% compared to the same quarter last year. Freshworks has set its FY 2025 guidance at 0.560-0.580 EPS. Q3 2025 guidance at 0.120-0.140 EPS. As a group, sell-side analysts predict that Freshworks will post -0.19 EPS for the current fiscal year.

Insider Activity at Freshworks

In related news, Director Johanna Flower sold 8,000 shares of the company's stock in a transaction dated Wednesday, July 2nd. The shares were sold at an average price of $14.80, for a total transaction of $118,400.00. Following the completion of the sale, the director owned 48,094 shares of the company's stock, valued at approximately $711,791.20. This represents a 14.26% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Barry L. Padgett sold 7,558 shares of the firm's stock in a transaction that occurred on Tuesday, July 1st. The stock was sold at an average price of $15.14, for a total transaction of $114,428.12. Following the completion of the transaction, the director directly owned 32,635 shares in the company, valued at $494,093.90. This trade represents a 18.80% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders have sold a total of 200,491 shares of company stock valued at $3,101,115 in the last ninety days. 11.17% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in the business. Xponance Inc. raised its stake in shares of Freshworks by 5.1% in the 1st quarter. Xponance Inc. now owns 15,605 shares of the company's stock valued at $220,000 after acquiring an additional 758 shares during the period. Amundi increased its holdings in 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 purchasing an additional 1,040 shares during the last quarter. Verdence Capital Advisors LLC increased its holdings in Freshworks by 7.4% in the 2nd 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 position in Freshworks by 11.0% in the second quarter. Vanguard Personalized Indexing Management LLC now owns 11,694 shares of the company's stock valued at $174,000 after purchasing an additional 1,160 shares during the period. Finally, Legato Capital Management LLC lifted its stake in Freshworks by 4.0% during the first quarter. Legato Capital Management LLC now owns 33,080 shares of the company's stock worth $467,000 after purchasing an additional 1,260 shares in the last quarter. 75.58% of the stock is currently owned by institutional investors and hedge funds.

Freshworks Company Profile

Freshworks Inc, a software development company, provides software-as-a-service products worldwide. It offers Freshworks Customer Service Suite, which provides automated, personalized self-service on various channels, including web, chat, mobile messaging, email, and social; Freshdesk, a ticketing-centric customer service solution; Freshsuccess, a customer success solution; and Freshchat that provides agents with a modern conversational experience to proactively engage customers across digital messaging channels.