Canaccord raises Freshworks stock target to $23, maintains buy

Wednesday, Canaccord Genuity maintained a Buy rating on Freshworks Inc (NASDAQ:FRSH) and increased its price target to $23.00 from $19.00. The $5.4 billion market cap company, which boasts an impressive 83.8% gross profit margin according to InvestingPro data, has shown strong presence in the robust IT/ESM market, evidenced by favorable results from peers such as ServiceNow (NYSE:NOW) and Atlassian (NASDAQ:TEAM), along with a strong start from Monday.com. The company’s solid performance is reflected in its 20.5% year-over-year revenue growth. Additionally, improvements in gross retention within the customer experience (CX) segment were noted as offsetting pressures in that business line.

The analysts at Canaccord Genuity also pointed to Freshworks’ efficient operating leverage and the potential for this trend to continue throughout 2025. Supporting this view, InvestingPro analysis shows the company maintains strong financial health with a current ratio of 3.26, indicating robust liquidity. They further underscored the impact of a newly announced $400 million stock repurchase program, which they believe will bolster cash generation and capital return, thus supporting the stock price.

Freshworks’ early adoption of early Gen AI/Agentic technology in its CX segment was acknowledged as a stable yet unspectacular aspect of the business. However, any signs of AI-driven improvements are seen as potential upside factors. The analysts expressed confidence in the company’s valuation, stating that Freshworks shares are trading at an attractive 20 times V/FCF on C2026E, suggesting the stock is undervalued.

In conclusion, Canaccord Genuity’s analysts reiterated their positive outlook on Freshworks, citing the company’s positioning in attractive markets, consistent operating leverage, and the new repurchase program as key drivers for continued support of the stock and the possibility of gradual multiple expansion.

In other recent news, Freshworks Inc. has been the subject of several notable developments. Morgan Stanley (NYSE:MS) raised its price target for the company from $19 to $21, maintaining an Equalweight rating. The firm’s analyst, Elizabeth Porter, cited Freshworks’ strong fourth-quarter performance and fiscal year 2025 revenue growth guide as key factors for this decision.

Similarly, JMP Securities also increased its price target for Freshworks Inc. from $24 to $27, maintaining a Market Outperform rating. This decision followed the company’s fourth-quarter results, which exceeded expectations. Freshworks’ non-GAAP earnings per share (EPS) reached $0.14, surpassing the consensus estimate of $0.10, and its revenue for the quarter was $195 million, exceeding the forecasted $190 million.

Furthermore, Freshworks reported fourth-quarter earnings and revenue that surpassed analyst expectations and issued upbeat guidance for the full year 2025. The company posted adjusted earnings per share of $0.14 for Q4, with revenue at $194.6 million, representing a 22% increase year over year.

These recent developments highlight Freshworks’ continued growth and positive performance, as acknowledged by both Morgan Stanley and JMP Securities.

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