Insider Buying at Freshworks: A Signal of Management Alignment and Undervaluation?

The recent insider activity at Freshworks Inc. (FRSH) has sparked renewed interest among investors, offering a nuanced lens through which to assess management alignment and valuation opportunities. While founder Girish Mathrubootham's exit as executive chairman and his subsequent investments in early-stage startups have dominated headlines according to reports, the direct stock purchases by key executives in Q3 2025 reveal a more concrete commitment to the company's long-term prospects.

Management Alignment: From Founder Transition to Executive Confidence

Mathrubootham's decision to step down in December 2025, coupled with his investments in ventures like Rocket and Startup Singam, underscores his continued alignment with Freshworks' entrepreneurial ecosystem according to reports. However, direct stock ownership by current leadership provides a stronger signal of confidence. According to a report by QuiverQuant, CEO Dennis Woodside and CFO Tyler Sloat each purchased over 170,000 shares in Q3 2025, investing approximately $1.99 million collectively according to QuiverQuant data. These transactions occurred amid Freshworks' strong Q3 earnings, which saw a 15% year-over-year revenue increase and a narrowed loss, suggesting executives are capitalizing on what they perceive as a favorable entry point.

Valuation Opportunity: Insiders Bet on a 52-Week Low

The timing of these insider purchases adds another layer of intrigue. At the time of the transactions, Freshworks' stock was trading near its 52-week low, raising questions about whether the market was underappreciating the company's fundamentals. UBS has maintained a Buy rating on FRSH with a $19.00 price target, citing its robust gross profit margin and growth trajectory toward $1.2 billion in revenue by FY28 according to UBS analysis. While skeptics question the sustainability of these targets, the executives' willingness to deploy significant capital at current prices implies a belief in the stock's undervaluation.

Balancing Optimism and Skepticism

Investors must weigh these signals against broader market dynamics. Mathrubootham's external investments, while aligned with Freshworks' innovation ethos, do not directly impact shareholder value. In contrast, the CEO and CFO's stock purchases represent a tangible vote of confidence. Yet, the market's muted reaction to these transactions-FRSH remains below UBS's target-reflects lingering doubts about the company's ability to execute its ambitious financial goals.

For value-oriented investors, the combination of insider buying at a discount and a cautiously optimistic analyst outlook presents a compelling case. However, the absence of significant follow-through from other insiders or institutional buyers suggests caution. The key will be monitoring whether these purchases translate into operational momentum or if the stock remains a discount to its intrinsic value.

Conclusion

Freshworks' insider activity in Q3 2025 highlights a bifurcated narrative: a founder pivoting to strategic investments and executives doubling down on the company's stock. While Mathrubootham's exit may have unsettled some shareholders, the leadership's direct financial commitment offers a counterpoint to market skepticism. For now, FRSH appears to straddle the line between undervaluation and unmet expectations, making it a stock worth watching for those willing to navigate its complexities.