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    Freshworks (FRSH) Valuation After Strong Q4 Results But Softer 2026 Profit Guidance

    Simply Wall St·02/15/2026 17:17:10
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    Freshworks (FRSH) is back in focus after its fourth quarter and 2025 results, where revenue and earnings topped expectations, but full year 2026 profit guidance came in below Wall Street forecasts.

    See our latest analysis for Freshworks.

    The latest guidance has been a clear turning point for sentiment. The 7 day share price return of an 18.83% decline and the 30 day share price return of a 34.72% decline point to fading momentum, despite a 1 day share price return of 2.84% after the results. Over the past year, the total shareholder return shows a 57.54% decline, and a 54.06% decline over three years, which underlines that recent weakness sits on top of an already difficult longer term performance record.

    If Freshworks' results have you reassessing software exposure, it could be worth broadening your view with our screener of 57 profitable AI stocks that aren't just burning cash as a starting point for other ideas.

    With Freshworks now trading well below analyst targets and after a sharp pullback despite positive reported earnings, the key question is whether this pessimism has gone too far or if the current price already reflects the company’s future growth potential.

    Most Popular Narrative: 59% Undervalued

    At $7.24, Freshworks is trading well below the most followed fair value estimate of $17.64, which is built on detailed revenue, margin and valuation assumptions.

    The rapid adoption of AI powered features (such as Copilot and Agentic AI) across both new and existing Freshworks customers is outpacing internal expectations, with over 5,000 paying customers and high attach rates in large deals; as AI monetization expands and early access Agentic products move to paid solutions, management expects this to materially boost revenue growth and average selling prices in 2026 and beyond.

    Read the complete narrative. Read the complete narrative.

    If you want to see how that kind of product uptake feeds into revenue curves, profit margins and a premium multiple assumption over time, the full narrative lays out the math behind that $17.64 figure.

    Result: Fair Value of $17.64 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, there are clear watchpoints, including tougher competition from larger SaaS players and uncertainty around how quickly Freshworks can turn early AI uptake into meaningful paid adoption.

    Find out about the key risks to this Freshworks narrative.

    Build Your Own Freshworks Narrative

    If you are not fully on board with this view or you prefer to run your own numbers and judgment, you can build a personalized Freshworks story in just a few minutes, starting with Do it your way.

    A great starting point for your Freshworks research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

    Looking for more investment ideas?

    If Freshworks has sharpened your thinking, do not stop here. Cast a wider net with focused stock lists that match the kind of portfolio you want to build.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.