Freshworks Analyst Praise Boosts AI Momentum and Market Expansion Outlook

Freshworks received a positive analyst endorsement from Oppenheimer, highlighting its AI momentum and market expansion. The endorsement emphasized the company's product-led growth and expansion into adjacent workflow markets. Freshworks' investment narrative focuses on its AI-powered business automation driving customer adoption and revenue, but investors should be aware of competitive threats and pricing uncertainties. The company's outlook anticipates $1.1 billion in revenue and $148.5 million in earnings by 2028, implying a 12.3% annual revenue growth and a $203.4 million increase in earnings.

Freshworks (NASDAQ:FRSH) has received a positive analyst endorsement from Oppenheimer, highlighting its AI momentum and market expansion. The endorsement emphasized the company's product-led growth and expansion into adjacent workflow markets. Freshworks' investment narrative focuses on its AI-powered business automation driving customer adoption and revenue, but investors should be aware of competitive threats and pricing uncertainties.

Freshworks' latest quarterly results show strong growth in AI product adoption, with AI products crossing $20 million in annual recurring revenue (ARR) in Q2 2025, more than doubling from the previous year. The company's net dollar retention rates improved to 106% in the quarter, indicating strong customer loyalty. Freshworks' gross margins also improved, reaching 86.1%, reflecting heightened economies of scale.

The company's expansion into adjacent workflow markets, particularly its Employee Experience (EX) software suite, has been a key driver of growth. Over 60% of Freshworks' annual recurring revenue (ARR) is generated from enterprise and mid-market clients, providing revenue stability amid macroeconomic downturns. Freshworks' AI tools, such as Freddy Copilot, have been successfully integrated into over half of its enterprise deals, further driving revenue growth.

Freshworks' financial flexibility is bolstered by its strong balance sheet, with nearly $1 billion in cash and no debt. The company's Rule of 40 profile—balancing high teens revenue growth with a low 20% pro forma operating margin—distinguishes it from many of its peers. Despite its positioning as a value stock, Freshworks' valuation multiples remain undervalued compared to its peers.

Looking ahead, Freshworks anticipates $1.1 billion in revenue and $148.5 million in earnings by 2028, implying a 12.3% annual revenue growth and a $203.4 million increase in earnings. While the company faces competitive threats and pricing uncertainties, its strong AI momentum and market expansion position it for long-term growth.

References:

[1] https://seekingalpha.com/article/4815410-freshworks-solid-growth-as-agentic-ai-tools-take-off
[2] https://finance.yahoo.com/news/maxiparts-ltd-asx-mxi-full-071045830.html