Oppenheimer downgrades Freshworks amid challenging operating environment

As previously reported, Oppenheimer analyst Brian Schwartz downgraded Freshworks (FRSH) to Perform from Outperform and removed the firm’s $15 price target on the shares. In Oppenheimer’s view, Freshworks is a solid company with a good opportunity in AI-enabled customer engagement that is embedded withing many SMB and mid-market workflows. However, a challenging operating environment during the AI technology transition has led to uninspiring and decelerating Employee Experience growth, only mid-single digit constant currency Customer Service growth, durability concerns around the moat and primary seat-based pricing model, low NRR and investor interest for owning SMiD Cap software names, and down year-over-year operating margin guidance in 2026, which will continue to weigh on fundamentals and sentiment this year, and make Freshworks a rebound last name, excluding a private equity takeout for the business.