Piper Sandler raises Freshworks stock price target to $24

On Wednesday, Piper Sandler analyst Brent Bracelin increased the price target for Freshworks Inc (NASDAQ:FRSH) to $24 from $20, while keeping an Overweight rating on the stock. Currently trading at $17.73, InvestingPro analysis suggests the stock is undervalued. Bracelin’s adjustment reflects his positive view on the company’s financial performance and future prospects.

In his analysis, Bracelin noted that Freshworks’ Experience (EX) segment achieved over $400 million in annual recurring revenue (ARR) following 20%+ organic growth and a 20%+ operating margin. The company’s recent top-line performance, which included a $5 million beat, and its 2025 growth outlook, projecting a 14% increase in constant currency, were cited as exceeding expectations. With impressive gross profit margins of 83.84% and overall revenue growth of 20.45% in the last twelve months, the company has demonstrated strong execution. This was particularly significant given the business’s substantial involvement in two debated areas: customer support and the EMEA (Europe, Middle East, and Africa) region.

The analyst praised Freshworks for its consistent solid execution, highlighting the Device42 cross-sell activities as a key driver behind the growth in the EX segment ARR. This growth effectively balanced the stagnant Customer Experience (CX) segment, which reported over $360 million in ARR and a 7% growth in constant currency, roughly in line with the previous quarter’s performance. InvestingPro subscribers can access 8 additional key insights about Freshworks’ performance and financial health metrics.

Bracelin expressed increased confidence in the company’s underlying growth levers, which led to the raised price target. He also pointed out that the risk-reward ratio for Freshworks is favorable, with valuations standing at 5 times the calendar year 2026 estimated enterprise value to sales (EV/S) and 20 times the calendar year 2026 estimated enterprise value to free cash flow (EV/FCF).

In conclusion, the analyst maintained the Overweight rating, signaling continued optimism about Freshworks’ stock performance and its ability to leverage growth opportunities moving forward.

In other recent news, Freshworks Inc has seen a series of positive developments, with numerous financial firms adjusting their stock targets for the company. Analyst Brett Knoblauch from Cantor Fitzgerald raised the target to $22, highlighting Freshworks’ strategic moves upmarket and advancements in artificial intelligence (AI). Scotiabank (TSX:BNS)’s Nick Altmann also increased the target to $19, noting the company’s favorable financial outlook for FY25 and the success of their AI offering, Freddy AI.

Oppenheimer’s Brian Schwartz lifted the target to $24, citing Freshworks’ strong fourth-quarter performance and optimistic guidance for 2025. Meanwhile, Canaccord Genuity maintained a Buy rating and raised the target to $23, acknowledging the company’s presence in a robust IT/ESM market and the positive impact of a newly announced $400 million stock repurchase program.

Lastly, Morgan Stanley (NYSE:MS) increased the price target to $21, attributing the decision to Freshworks’ strong fourth-quarter performance and alignment with fiscal year 2025 revenue growth expectations. These recent developments indicate a positive outlook for Freshworks from the financial sector.

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