Freshworks (NASDAQ:FRSH) Trading Down 5.7% - Here's Why

Key Points

• Freshworks shares fell 5.7% in mid-day trading, with the stock dropping to around $10.08 after closing at $10.69 the prior day. Trading volume was also far below normal.
• Several analysts have turned more cautious on the stock, including target cuts and downgrades from Morgan Stanley, Zacks Research, Weiss Ratings, and Wall Street Zen. The consensus rating is currently Hold, with an average price target of $12.18.
• Freshworks recently reported better-than-expected revenue of $228.63 million and EPS of $0.11, matching estimates, while revenue grew 16.5% year over year. The company also disclosed recent insider selling by executives and directors.

Freshworks Inc. (NASDAQ:FRSH - Get Free Report) dropped 5.7% during mid-day trading on Wednesday . The stock traded as low as $10.02 and last traded at $10.0820. Approximately 666,899 shares changed hands during mid-day trading, a decline of 94% from the average daily volume of 11,337,360 shares. The stock had previously closed at $10.69.

Analysts Set New Price Targets

Several research analysts recently weighed in on FRSH shares. Morgan Stanley reduced their price target on shares of Freshworks from $15.00 to $13.00 and set an "equal weight" rating for the company in a research report on Monday, May 11th. Weiss Ratings lowered Freshworks from a "sell (d+)" rating to a "sell (d)" rating in a research note on Thursday, May 7th. Citigroup reissued a "market outperform" rating on shares of Freshworks in a report on Tuesday, June 2nd. Zacks Research lowered Freshworks from a "strong-buy" rating to a "hold" rating in a research note on Friday, July 10th. Finally, Wall Street Zen downgraded Freshworks from a "buy" rating to a "hold" rating in a research note on Saturday, May 9th. Six analysts have rated the stock with a Buy rating, eight have given a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, the company currently has a consensus rating of "Hold" and an average target price of $12.18.

Freshworks Trading Down 6.2%

The company has a market cap of $2.77 billion, a price-to-earnings ratio of 16.17 and a beta of 0.88. The stock's fifty day simple moving average is $9.68 and its 200 day simple moving average is $9.24.

Freshworks (NASDAQ:FRSH - Get Free Report) last released its earnings results on Tuesday, May 5th. The company reported $0.11 earnings per share for the quarter, hitting analysts' consensus estimates of $0.11. The business had revenue of $228.63 million for the quarter, compared to analyst estimates of $223.63 million. Freshworks had a net margin of 20.69% and a return on equity of 4.27%. The business's revenue was up 16.5% on a year-over-year basis. During the same period last year, the company posted $0.18 EPS. Freshworks has set its FY 2026 guidance at 0.610-0.630 EPS and its Q2 2026 guidance at 0.130-0.130 EPS. On average, analysts predict that Freshworks Inc. will post -0.02 EPS for the current year.

Insider Buying and Selling

In other Freshworks news, CAO Philippa Lawrence sold 10,530 shares of the business's stock in a transaction on Wednesday, June 17th. The stock was sold at an average price of $9.18, for a total transaction of $96,665.40. Following the transaction, the chief accounting officer owned 465,823 shares of the company's stock, valued at approximately $4,276,255.14. The trade was a 2.21% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, Director Jennifer H. Taylor sold 6,618 shares of the firm's stock in a transaction on Thursday, July 2nd. The stock was sold at an average price of $10.44, for a total value of $69,091.92. Following the completion of the sale, the director directly owned 62,673 shares of the company's stock, valued at $654,306.12. This trade represents a 9.55% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 27,236 shares of company stock worth $270,331. 8.54% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Freshworks

Several institutional investors and hedge funds have recently bought and sold shares of FRSH. Vanguard Group Inc. increased its holdings in shares of Freshworks by 3.5% during the 4th quarter. Vanguard Group Inc. now owns 27,240,469 shares of the company's stock worth $333,696,000 after buying an additional 922,549 shares during the last quarter. Wellington Management Group LLP lifted its holdings in Freshworks by 9.2% in the fourth quarter. Wellington Management Group LLP now owns 5,359,784 shares of the company's stock valued at $65,657,000 after acquiring an additional 453,627 shares during the last quarter. Geode Capital Management LLC grew its position in Freshworks by 1.9% in the fourth quarter. Geode Capital Management LLC now owns 5,126,112 shares of the company's stock worth $62,805,000 after acquiring an additional 95,720 shares during the period. State Street Corp grew its position in Freshworks by 1.2% in the fourth quarter. State Street Corp now owns 4,904,684 shares of the company's stock worth $60,082,000 after acquiring an additional 56,935 shares during the period. Finally, Fuller & Thaler Asset Management Inc. increased its stake in Freshworks by 11.2% during the fourth quarter. Fuller & Thaler Asset Management Inc. now owns 4,748,985 shares of the company's stock worth $58,175,000 after acquiring an additional 478,473 shares during the last quarter. 75.58% of the stock is currently owned by institutional investors and hedge funds.

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.

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