Morgan Stanley raises Freshworks stock price target to $21 from $19

On Wednesday, Morgan Stanley (NYSE:MS) showed a positive outlook on Freshworks Inc (NASDAQ:FRSH) by increasing the price target on the company’s shares. The new target is set at $21.00, up from the previous $19.00, while the firm maintained an Equalweight rating on the stock. According to InvestingPro data, analyst targets for the stock range from $13 to $27, with the company currently showing signs of being slightly undervalued based on its Fair Value analysis.

In her assessment, Morgan Stanley’s analyst Elizabeth Porter cited several factors contributing to this decision. She noted that Freshworks displayed a strong performance in the fourth quarter and provided a fiscal year 2025 revenue growth guide that aligned with expectations. The company’s impressive 83.84% gross profit margin and strong 20.45% revenue growth, as reported by InvestingPro, support this positive outlook. Porter also mentioned that comments on stability in the company’s Experience (EX) and Customer Experience (CX) sectors indicate that past concerns over downward revisions and execution challenges may now be resolved.

The analyst further explained that the impact of lapping Device42, an acquisition by Freshworks, is expected to slow growth in the second half of the year. However, Porter suggested that Morgan Stanley is awaiting further evidence to build confidence in potential upward revisions before fully endorsing the stock.

Freshworks, a customer engagement software company, has been under scrutiny by investors for its growth trajectory and execution capabilities. With the updated price target, Morgan Stanley signals that the company may be moving past previous hurdles.

The stock market will likely keep a close eye on Freshworks’ performance in the coming months, particularly regarding its ability to sustain growth momentum and whether upward revisions to estimates will materialize as anticipated by Morgan Stanley.

In other recent news, Freshworks Inc. has been in the spotlight following its impressive fourth-quarter results that surpassed expectations. The company’s non-GAAP earnings per share reached $0.14, outperforming the consensus estimate of $0.10. Freshworks’ revenue for the quarter was $195 million, exceeding the forecasted $190 million, marking a 22% year-over-year increase. This growth was bolstered by a $10.3 million benefit from the acquisition of Device 42.

In addition to its strong earnings, the company’s billings for the quarter stood at $222 million, surpassing the consensus of $211 million and representing a 23% increase from the same period last year. Following these robust results, JMP Securities raised its price target for Freshworks to $27, up from the previous $24, while maintaining a Market Outperform rating.

Freshworks also provided an upbeat guidance for fiscal year 2025, projecting revenue between $809 million and $821 million. This projection is slightly above the analyst consensus of $813.5 million. These recent developments underscore Freshworks’ strong growth trajectory and market performance.

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