HubSpot Faces Analyst Scrutiny: Stock Target Cuts Amid Macro Headwinds

HubSpot stock target cut amid macro headwinds, retains outperform By Investing.com

On Thursday, BMO Capital adjusted its outlook on shares of HubSpot Inc (NYSE:HUBS), a leading developer of marketing, sales, and service software. The firm revised its price target down to $570 from the previous $635 while maintaining an Outperform rating on the stock. The adjustment follows HubSpot's recent quarterly results, which exhibited strong performance across all metrics. The company has been effectively navigating through the challenging macroeconomic environment, according to BMO Capital's assessment. Despite the robust quarter, the firm noted that HubSpot's management has increased its full-year 2024 revenue guidance by a margin that was narrower than the quarter's outperformance and the positive foreign exchange revisions for the fiscal year. In light of these factors, BMO Capital has revised its growth estimates for the second half of fiscal year 2024, expecting a deceleration in revenue and billings growth. Nonetheless, the firm remains optimistic about HubSpot's position in the market, citing the company's technical leadership and its capacity to harness artificial intelligence. The analyst from BMO Capital expressed continued confidence in HubSpot's future, emphasizing the company's strong execution and innovative edge. The revised price target of $570 reflects the firm's anticipation of ongoing macroeconomic challenges that may impact HubSpot in the short term. Despite these headwinds, the firm reiterated its positive stance on the stock, underscoring its belief in the company's long-term potential. As HubSpot Inc (NYSE:HUBS) navigates the dynamic market landscape, recent data from InvestingPro offers additional insights into the company's financial health and stock performance. The company boasts an impressive gross profit margin of 84.24% for the last twelve months as of Q1 2024, highlighting its ability to maintain profitability in its core operations. Despite facing volatility, with the stock price taking significant hits over the last six months, analysts remain optimistic, predicting net income growth and profitability for the year. InvestingPro Tips suggest that while HubSpot's stock has experienced a downturn recently, with a 1-month price total return of -21.4%, its liquid assets exceed short-term obligations, indicating a strong liquidity position. The company operates with a moderate level of debt, suggesting a balanced approach to leveraging and financial stability. Moreover, HubSpot does not pay a dividend, which is typical for growth-oriented tech companies reinvesting earnings into expansion efforts. For investors considering HubSpot's long-term trajectory, it's worth noting that the company has delivered a high return over the last decade and the last five years. With a market capitalization of $23.48 billion and a forward-looking perspective, HubSpot's strategic initiatives and technical leadership may continue to drive its market position. Investors can explore further InvestingPro Tips, including 13 additional insights, to gain a more comprehensive understanding of HubSpot's potential and performance metrics.

Evercore ISI lowers HubSpot shares target, notes slowdown in guidance By Investing.com

HubSpot reported second-quarter revenues that surpassed expectations, with total revenue reaching $637 million, a 20% year-over-year increase. This performance exceeded the analyst's and consensus forecasts of $617 million and $619 million, respectively. The company's subscription revenue showed a notable increase to $624 million, up by 20.5% and surpassing the forecast of $606 million. Additionally, billings grew by approximately 20% in both reported and constant currency terms, and operating margins were around 2 percentage points higher than estimated, at about 17%. HubSpot's full-year 2024 revenue guidance was raised slightly, yet the updated guidance suggests a slowdown in the second half of the year, with an implied growth of around 15% for the fourth quarter. Despite a conservative revision of the second-half guidance, the analyst indicated that HubSpot's new pricing strategy and strong customer growth, particularly at the Starter tier, are progressing well. After three months of the new pricing model, the company's net revenue retention (NRR) increased for customers. This, along with the positive reception of AI-driven products like Content Hub, is expected to be a growth catalyst in calendar year 2025. HubSpot's multi-hub adoption and net new customer additions, which increased by approximately 23% or 11.2k, were also highlighted as positive indicators. The analyst concluded that while HubSpot is executing effectively in a challenging environment, investors might adopt a "wait and see" approach at the current levels. The revised price target of $550 is based on approximately 9 times the enterprise value to the calendar year 2025 revenue estimate. In other recent news, HubSpot Inc. has seen a series of noteworthy developments. The company reported a 23% year-over-year revenue increase in Q1 2024, driven by solid subscription growth and the addition of over 11,700 new customers. However, a cautious buying environment and a slowdown in deal progression were observed. KeyBanc upgraded HubSpot's stock from Underweight to Sector Weight, citing decreased execution risks and revised growth expectations. Scotiabank reduced its price target for HubSpot shares to $650, maintaining a Sector Outperform rating, while Citi reaffirmed a Buy rating and $767.00 price target. Wells Fargo (NYSE:WFC) maintained an Overweight rating and raised its shares target to $750, noting significant upsell opportunities due to recent pricing changes. Despite the halted acquisition talks with Alphabet (NASDAQ:GOOGL), analysts believe the decrease in share value presents a buying opportunity. Recent product introductions like Content Hub, Service Hub, and HubSpot AI, along with a new pricing model based on seats, have stirred mixed reactions from analysts. These are some of the recent developments shaping HubSpot's trajectory. As HubSpot Inc (NYSE:HUBS) navigates through a dynamic market landscape, real-time data from InvestingPro provides a nuanced view of the company's financial health and stock performance. With a market capitalization of $23.48 billion, HubSpot's significant gross profit margin of 84.24% over the last twelve months as of Q1 2024 underscores its efficient revenue conversion, aligning with Evercore ISI's recognition of the company's robust customer growth and successful pricing strategy. However, the stock's volatility is reflected in its price movements, with a notable 21.4% decrease over the last month and a 26.71% decline over the last six months. This volatility is a critical consideration for investors contemplating the "wait and see" approach mentioned by Evercore ISI. Furthermore, while the company has not been profitable over the last twelve months, analysts predict a turnaround with profitability expected this year, as indicated by one of the InvestingPro Tips. For investors seeking a deeper dive into HubSpot's financials and stock prospects, InvestingPro offers additional insights, including 13 more InvestingPro Tips available at https://www.investing.com/pro/HUBS. These tips provide valuable perspectives on the company's financial position and market expectations, such as HubSpot's impressive long-term returns and its current trading at a high revenue valuation multiple.

HubSpot Analysts Cut Their Forecasts After Q2 Results - HubSpot (NYSE:HUBS)

HubSpot, Inc. HUBS posted better-than-expected second-quarter earnings on Wednesday. HubSpot reported quarterly earnings of $2.03 per share, which beat the analyst consensus estimate of $1.63 by 24.54%. Quarterly sales clocked in at $637.2 million, which beat the analyst consensus estimate by 2.87% and represents a 20.42% increase from the same period last year. "Q2 was another solid quarter of revenue growth and profitability driven by our rapid pace of innovation and consistent execution," said Yamini Rangan, CEO of HubSpot. "I am thrilled to see customers consolidating on HubSpot and the momentum we have in becoming the customer platform of choice for scaling companies." HubSpot sees third-quarter revenue in a range of $646 million to $647 million, versus the $646.69 million estimate, and earnings of between $1.89 and $1.91 per share, versus the $1.89 estimate. The company sees full-year revenue in a range of $2.567 billion to $2.573 billion, versus the $2.56 billion estimate, and earnings of between $7.64 and $7.70 per share, versus the $7.36 estimate. HubSpot shares rose 2.4% to close at $460.74 on Wednesday. These analysts made changes to their price targets on HubSpot following earnings announcement. Truist Securities analyst Terry Tillman reiterated HubSpot with a Buy rating and cut the price target from $700 to $600. Canaccord Genuity analyst Richard Davis maintained HubSpot with a Buy rating and lowered the price target from $700 to $600. Read Next: US Stocks Decline As SMCI's Margin Miss Brings Nvidia And Other AI Stocks Under Pressure: Investor Sentiment Remains In 'Extreme Fear' Zone Market News and Data brought to you by Benzinga APIs