Freshworks (NASDAQ:FRSH) Shares Gap Down After 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.

Several other research analysts have also commented on FRSH. Oppenheimer set a $15.00 price objective on shares of Freshworks in a research note on Wednesday. Zacks Research downgraded shares of Freshworks from a “strong-buy” rating to a “hold” rating in a research note on Monday, January 12th. Citigroup reiterated an “outperform” rating on shares of Freshworks in a research note on Wednesday. Cantor Fitzgerald lowered their target price on Freshworks from $15.00 to $12.00 and set an “overweight” rating for the company in a research note on Wednesday. Finally, BTIG Research started coverage on Freshworks in a research report on Tuesday, December 16th. They issued a “neutral” rating on the stock. Eight research analysts have rated the stock with a Buy rating, eight have issued a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, the company currently has an average rating of “Hold” and a consensus target price of $14.92.

Insider Activity

In other news, insider Mika Yamamoto sold 15,012 shares of the company’s stock in a transaction on Friday, December 5th. The shares were sold at an average price of $13.00, for a total value of $195,156.00. Following the completion of the transaction, the insider owned 490,350 shares in the company, valued at approximately $6,374,550. This represents a 2.97% decrease in their position. 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 stock in a transaction on Tuesday, December 2nd. The shares were sold at an average price of $12.06, for a total transaction of $70,502.76. Following the completion of the transaction, the chief accounting officer directly owned 392,711 shares in the company, valued at $4,736,094.66. This trade represents a 1.47% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 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 beat on both EPS and revenue, with improving profits and cash flow; company exceeded the high end of revenue and non‑GAAP margin guidance, reported 16% revenue growth for 2025 and strong operating cash flow. Freshworks Reports Fourth Quarter and Full Year 2025 Results
• Positive Sentiment: Management is pushing AI and EX/CX product adoption (Freddy AI, Freshservice enhancements) and set targets (aiming for $1.3B ARR by 2028), which supports longer‑term revenue expansion. Freshworks targets $1.3B ARR by 2028
• Neutral Sentiment: Revenue guidance for FY2026 ($952–$960M) came in above street revenue estimates, but management’s FY EPS guide (non‑GAAP $0.55–$0.57) is below consensus — a mixed signal that complicates near‑term earnings expectations. Freshworks forecasts annual revenue above estimates
• Neutral Sentiment: Analysts are re‑assessing Freshworks’ competitive positioning and valuation after the print — coverage pieces note the story is shifting as competitors and AI dynamics are re‑priced. How Freshworks (FRSH) Story Is Shifting
• Negative Sentiment: Several firms cut price targets shortly after the results (examples: JMP/Citizens cut a prior high target, Wells Fargo lowered its target to $10, Cantor Fitzgerald trimmed to $12), signaling reduced near‑term conviction and driving downside pressure.
• Negative Sentiment: Investors interpreted the weaker-than-expected EPS guidance and other mixed signals as disappointing, triggering large intraday volume and selling pressure; coverage headlines explicitly cite the stock “nosediving.” Why Freshworks (FRSH) stock is nosediving
• Neutral Sentiment: Unusual options activity (a spike in call buying) was observed on the print day — this can amplify intraday volatility but is ambiguous for direction. Separate short‑interest reports appear to show data inconsistencies; monitor updated filings for clarity.

Institutional Trading of Freshworks

Institutional investors and hedge funds have recently made changes to their positions in the company. Vanguard Group Inc. grew its stake in 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. Eminence Capital LP grew its position in shares of 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 acquiring an additional 2,074,641 shares during the last quarter. Geode Capital Management LLC increased 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 valued at $62,805,000 after acquiring an additional 95,720 shares during the period. Wellington Management Group LLP raised its position in Freshworks by 9.5% in 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 boosted its stake in Freshworks by 2.1% during the 2nd quarter. State Street Corp now owns 4,850,487 shares of the company’s stock worth $72,321,000 after purchasing an additional 101,132 shares during the period. 75.58% of the stock is owned by hedge funds and other institutional investors.

Freshworks Trading Down 16.4%

The stock has a market cap of $2.06 billion, a price-to-earnings ratio of 11.41 and a beta of 0.89. The stock’s 50 day moving average is $11.57 and its two-hundred day moving average is $12.02.

Freshworks (NASDAQ:FRSH) last announced its earnings results on Tuesday, February 10th. The company reported $0.14 EPS for the quarter, beating analysts’ consensus estimates of $0.11 by $0.03. Freshworks had a net margin of 21.90% and a return on equity of 4.77%. The business had revenue of $222.74 million during the quarter, compared to analysts’ expectations of $218.76 million. During the same period in the prior year, the company earned $0.14 earnings per share. The business’s revenue was up 14.5% compared to the same quarter last year. Freshworks has set its Q1 2026 guidance at 0.100-0.120 EPS and its FY 2026 guidance at 0.550-0.570 EPS. On average, sell-side analysts predict 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.