Oppenheimer upgrades Freshworks to Outperform on good improving business story

As previously reported, Oppenheimer analyst Brian Schwartz upgraded Freshworks (FRSH) to Outperform from Perform with a $22 price target The firm acknowledges that this call may seem early given fears over AI disruption and low investor sentiment, but says it sees a good improving business story and thematic play on a better SMB market in 2025. Oppenheimer’s struggle with Freshworks over the past year has largely been tied to concerns of a demand slowdown in the SMB market and adverse structural changes that AI would bring to the customer experience business. The Street has finally accepted that a weak SMB hiring, and demand market cannot be easily overcome by moving upmarket and strong growth in the IT market. But the macro tide looks set to turn from a headwind to a tailwind for Freshworks business later this year and valuation is at an attractive level, adds the firm.