Freshworks Downgraded to “Hold” by Zacks Research Amid Analyst Activity

On November 5, 2023, Zacks Research downgraded shares of Freshworks (NASDAQ: FRSH) from a strong-buy rating to a hold rating. This decision reflects a shift in sentiment regarding the company’s stock, as highlighted in a research report released by Zacks.com.

Analysts have been actively assessing Freshworks in recent months. BTIG Research initiated coverage on December 16, 2023, assigning a “neutral” rating to the stock. Similarly, Wells Fargo & Company began its coverage on September 30, 2023, with an “equal weight” rating and a target price of $13.00. In contrast, Weiss Ratings affirmed a “sell (e+)” rating on October 8, 2023. Meanwhile, Canaccord Genuity Group lowered its price target for Freshworks from $23.00 to $19.00 while maintaining a “buy” rating. UBS Group, on November 14, reiterated its “buy” rating with a price target of $17.00.

The overall analyst sentiment reflects a mixed outlook for Freshworks. Currently, seven research analysts have rated the stock as a buy, eight have issued a hold rating, and one has provided a sell rating. According to data from MarketBeat, Freshworks has an average rating of “Hold” and an average target price of $19.23.

Recent Earnings Report and Financial Performance

Freshworks recently released its earnings results for the third quarter of 2023. The company reported earnings of $0.16 per share, surpassing analysts’ estimates of $0.13 by $0.03. Revenue for the quarter reached $215.12 million, exceeding the consensus estimate of $208.80 million. Year-over-year, the company’s revenue increased by 15.3%. Last year during the same quarter, Freshworks reported earnings of $0.11 per share.

Looking ahead, Freshworks has set its guidance for the fourth quarter of 2025 with an expected earnings per share range of $0.100 to $0.120. Analysts predict that the company will experience a loss of $0.19 earnings per share for the current year.

Insider Trading Activity

In recent insider trading news, Mika Yamamoto, an insider, sold 15,012 shares of Freshworks on December 5, 2023, at an average price of $13.00. This sale totaled $195,156. Following this transaction, Yamamoto holds 490,350 shares valued at approximately $6,374,550, representing a 2.97% decrease in their position.

Conversely, Tyler Sloat, another insider, purchased 171,615 shares on November 11, 2023, at an average cost of $11.62 per share, amounting to $1,994,166.30. This acquisition increased Sloat’s holdings to 1,149,244 shares, valued at $13,354,215.28. Over the past three months, insiders have sold a total of 22,267 shares, worth $282,301, indicating that 11.17% of the stock is currently owned by corporate insiders.

Institutional Investment Trends

Several institutional investors have made adjustments to their holdings in Freshworks recently. Royal Bank of Canada increased its holdings by 120.8% in the first quarter, now owning 21,388 shares worth $302,000. Amundi raised its position by 1.3%, owning 80,074 shares valued at $1,049,000 after acquiring an additional 1,040 shares.

Moreover, Goldman Sachs Group Inc. raised its stake by 35.1%, owning 2,225,056 shares valued at $31,396,000. Woodline Partners LP and Focus Partners Wealth also increased their stakes, reflecting a broader interest in Freshworks. Currently, institutional investors hold 75.58% of the stock.

About Freshworks

Freshworks, Inc. is a global provider of cloud-based customer engagement software designed to enhance customer support, sales, marketing, and IT service operations. The company offers an integrated suite of solutions that enable organizations to provide seamless experiences across various channels, including email, chat, phone, and social media. Freshworks’ platform features modern interfaces and incorporates automation and AI-driven insights to improve efficiency and customer satisfaction. Its flagship product, Freshdesk, serves as a helpdesk solution, while Freshservice addresses IT service management needs.

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