What Happened?
Shares of business software provider Freshworks (NASDAQ: FRSH) fell 3.5% in the afternoon session after the stock continued to slide following the company's recent Investor Day.
The drop comes even as JMP Securities reiterated its "Market Outperform" rating and a $27.00 price target on the company. In a note, the investment firm highlighted that Freshworks shares had already closed down approximately 1% in regular trading after the event, suggesting investors may not have been impressed with the presentation. This negative sentiment appears to have carried over into today's trading. The move also adds to the stock's recent weakness, with JMP noting that Freshworks shares have declined 14% year-to-date, significantly underperforming the broader market.
The shares closed the day at $12.45, down 3.8% from previous close.
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What Is The Market Telling Us
Freshworks’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock dropped 2.5% on the news that the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
Freshworks is down 21.7% since the beginning of the year, and at $12.45 per share, it is trading 37% below its 52-week high of $19.75 from January 2025. Investors who bought $1,000 worth of Freshworks’s shares at the IPO in September 2021 would now be looking at an investment worth $261.83.
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