How Will Analyst Downgrades and Freddy AI Momentum Shape Freshworks' (FRSH) Investment Outlook?

• In the past week, Freshworks Inc. experienced near-term volatility following analyst downgrades and lowered price targets ahead of the company's Q3 earnings report scheduled for November 5, 2025.
• Despite these cautious revisions, analysts highlight the company's accelerating profitability and the Freddy AI platform's growing influence, pointing to continued strength in underlying fundamentals.
• We'll examine how analyst sentiment shifts amid growing traction for Freddy AI influence Freshworks' overall investment narrative.

We've found 17 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Freshworks Investment Narrative Recap

To be a Freshworks shareholder today, you need to believe in the company’s ability to accelerate profitability and capitalize on the widespread adoption of its Freddy AI platform, even as competitive and margin pressures persist. The recent analyst downgrades and lowered price targets do not materially alter the near-term catalyst, the Q3 earnings report on November 5, 2025, although they do heighten awareness of ongoing risks like competition from larger SaaS providers and uncertainty around AI monetization.

Among recent announcements, Freshworks reported non-GAAP operating income more than tripling year-over-year in Q2 2025, driven by momentum from its Freddy AI suite, which has now surpassed 5,000 paying customers and is supporting growth in high-value enterprise deals. This progress suggests that the company’s investments in AI remain a crucial catalyst ahead of quarterly results and ongoing profitability milestones.

Still, despite improvements in AI adoption and operating results, investors should be mindful of increasing competition from larger players that could dampen future growth if...

Read the full narrative on Freshworks (it's free!)

Freshworks' narrative projects $1.1 billion in revenue and $145.1 million in earnings by 2028. This requires 12.3% yearly revenue growth and a $200 million earnings increase from -$54.9 million today.

Uncover how Freshworks' forecasts yield a $19.64 fair value, a 72% upside to its current price.

Exploring Other Perspectives

Four individual fair value estimates from the Simply Wall St Community range from US$15.12 to US$27.32 per share, highlighting strong differences in investor outlook. With AI platform monetization still in its early stages, these varied opinions reflect broader uncertainties about Freshworks’ long-term revenue potential.

Explore 4 other fair value estimates on Freshworks - why the stock might be worth just $15.12!

Build Your Own Freshworks Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Freshworks research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Freshworks research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Freshworks' overall financial health at a glance.

Interested In Other Possibilities?

Our top stock finds are flying under the radar-for now. Get in early:

• AI is about to change healthcare. These 33 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.
• Rare earth metals are the new gold rush. Find out which 37 stocks are leading the charge.
• The end of cancer? These 28 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com