Update shared on 01 Nov 2025
Analysts have reduced their price target for Freshworks by $2 to $16, citing ongoing peer multiple compression and cautious outlooks on certain business segments, even though the company has shown steady revenue growth and maintains strong positioning as an AI-native service platform.
Analyst Commentary
Recent Street research highlights both optimism and caution regarding Freshworks' performance and outlook. Analysts acknowledge several positive factors supporting the company, while also noting challenges that could impact its valuation and growth trajectory.
Bullish Takeaways- Freshworks maintains a consistent record of revenue growth, particularly within its EX segment. This performance is in line with internal targets and market expectations.
- The company's positioning as an AI-native service platform is seen as a key differentiator. It effectively bridges the gap between basic solutions and complex platforms.
- Analysts view the EX segment’s revenue targets as reasonable and achievable, which offers confidence in near-term execution.
- There is recognition of unique capabilities within Freshworks’ offerings, which could support further market share gains as AI-driven platforms gain traction.
- Valuation pressure remains present, with peer multiple compression leading to reduced price targets, despite stable forecasts.
- Analysts maintain a cautious stance on the CX segment, suggesting potential headwinds or underperformance relative to other areas of the business.
- Even with a solid growth narrative, rating adjustments reflect concerns about the company’s ability to deliver outsized returns in current market dynamics.
- Some analysts express reservations about execution risks tied to Freshworks' expansion into more competitive and complex segments of the market.
Valuation Changes
- Fair Value estimate remains unchanged at $19.64.
- Discount Rate has decreased slightly from 8.45% to 8.43%.
- Revenue Growth projections are stable at 13.75%.
- Net Profit Margin has fallen marginally from 12.75% to 12.56%.
- Future P/E ratio has risen slightly from 44.23x to 44.86x.
Disclaimer
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