Freshworks: Conservative Guidance Masks Underlying Strength in Enterprise and Employee Experience Growth, Supporting Buy Rating

Scott Berg, an analyst from Needham, maintained the Buy rating on Freshworks. The associated price target was lowered to $15.00.

Scott Berg has given his Buy rating due to a combination of factors tied to Freshworks’ underlying business performance and conservative guidance posture. He notes that while reported billings came in below prior expectations, this was largely caused by fewer early renewals and contract-duration dynamics rather than a deterioration in sales activity, as evidenced by strong growth in larger customer cohorts and favorable commentary around the enterprise service management offering.

He also interprets the softer operating income outlook for FY26 as intentionally cautious, particularly in light of management’s track record of surpassing margin targets, which suggests potential upside to profitability over time. Although customer experience revenue growth was somewhat slower than anticipated, the more rapidly expanding employee experience segment is becoming a larger share of total recurring revenue, reinforcing the long‑term growth narrative that underpins his positive stance on the stock.

Berg covers the Technology sector, focusing on stocks such as Freshworks, Workday, and Five9. According to TipRanks, Berg has an average return of -7.9% and a 36.20% success rate on recommended stocks.

In another report released today, Citizens JMP also maintained a Buy rating on the stock with a $16.00 price target.