Piper Sandler has reduced its price target for Freshworks (FRSH, Financial) from $24 to $20, maintaining an Overweight rating on the stock. This adjustment reflects broader challenges in the cloud applications and analytics sector, driven by ongoing trade tariffs, policy changes, and complications in the adoption of artificial intelligence.
Analysts note that the industry is facing diminished growth prospects for the fourth consecutive year. Additionally, difficulties in implementing AI technologies are exacerbating investor concerns, suggesting that the AI-driven enthusiasm might be waning. As a result, valuation multiples within the sector have fallen to their lowest point in seven years.
Despite these headwinds, the direct impact of tariffs on software models is considered minor. Piper Sandler's analysis indicates that companies in this space, including Freshworks, are experiencing a decline in investor confidence, which is influencing stock performance and target projections.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 16 analysts, the average target price for Freshworks Inc (FRSH, Financial) is $19.94 with a high estimate of $27.00 and a low estimate of $11.00. The average target implies an upside of 63.29% from the current price of $12.21. More detailed estimate data can be found on the Freshworks Inc (FRSH) Forecast page.
Based on the consensus recommendation from 18 brokerage firms, Freshworks Inc's (FRSH, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Freshworks Inc (FRSH, Financial) in one year is $22.65, suggesting a upside of 85.5% from the current price of $12.21. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Freshworks Inc (FRSH) Summary page.
