HubSpot (HUBS) AI Stock Analysis

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HubSpot

(NYSE:HUBS)

Rating:70Neutral

Price Target:

$682.00

▲(10.55%Upside)

HubSpot's strong financial performance and positive earnings call sentiment are key strengths, supported by revenue and customer growth, and strategic initiatives like AI adoption and share buybacks. However, ongoing net losses and a high P/E ratio highlight valuation concerns, along with mixed technical indicators, create potential headwinds.

Positive Factors

Financial performance

HubSpot reported a revenue and billings beat compared to consensus, showing strong financial performance.

Growth initiatives

Execution was solid with HubSpot delivering on its key growth initiatives of more platform adoption, AI innovation, upmarket expansion, and acquisition.

Platform adoption

Platform adoption remains a key growth driver for HubSpot.

Negative Factors

Guidance concerns

HubSpot reported a solid 1Q, but they didn't flow through the Q1 beat to the updated FY25 revenue guidance.

Revenue retention

NRR downticked to 102% as expected from 104% last quarter, with expectations to remain in the low 100s until macro improves.

Valuation concerns

HubSpot trades at 9.9 times revenue estimate, while peers that are growing 15%-20% are trading at 7.1 times revenue, suggesting a premium valuation.

HubSpot (HUBS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$32.51B

Dividend YieldN/A

Average Volume (3M)662.63K

Price to Earnings (P/E)7452.2

Beta (1Y)1.49

Revenue Growth19.17%

EPS Growth83.20%

CountryUS

Employees8,574

SectorTechnology

Sector Strength80

IndustrySoftware - Application

Share Statistics

EPS (TTM)1.78

Shares Outstanding52,737,568

10 Day Avg. Volume564,573

30 Day Avg. Volume662,633

Financial Highlights & Ratios

PEG Ratio49.12

Price to Book (P/B)16.32

Price to Sales (P/S)0.00

P/FCF Ratio56.62

Enterprise Value/Market Cap0.98

Enterprise Value/Revenue3.26

Enterprise Value/Gross Profit14.31

Enterprise Value/Ebitda110.82

Forecast

1Y Price Target

$748.61

Price Target Upside21.35% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering27

HubSpot Business Overview & Revenue Model

Company DescriptionHubSpot, Inc. (HUBS) is a leading provider of inbound marketing, sales, and customer service software, helping businesses grow through its comprehensive suite of tools designed to enhance customer engagement and optimize marketing strategies. Founded in 2006 and headquartered in Cambridge, Massachusetts, HubSpot offers a cloud-based platform that integrates various functions such as blogging, search engine optimization, social media monitoring, content management, web analytics, landing pages, and customer relationship management, aimed at small to medium-sized businesses.

How the Company Makes MoneyHubSpot makes money primarily through a subscription-based revenue model, offering its marketing, sales, and service tools as part of a Software-as-a-Service (SaaS) platform. The company generates revenue through tiered subscription plans, which vary in features and pricing, allowing businesses of different sizes to choose packages that best fit their needs. Key revenue streams include the Marketing Hub, Sales Hub, Service Hub, and the CMS Hub, each providing distinct functionalities to manage and enhance customer interactions. HubSpot also earns revenue from professional services and training, which help clients effectively implement and utilize its software. The company benefits from partnerships with third-party developers and service providers, who contribute to HubSpot's ecosystem through integrations and extensions that enhance the platform's value for users.

HubSpot Key Performance Indicators (KPIs)

Any

Total Customers

Total Customers
Indicates the overall scale of HubSpot's user base, reflecting market penetration and potential for upselling and cross-selling opportunities.

Chart InsightsHubSpot's total customer base has been on a robust upward trajectory, with a notable 19% increase year-over-year, reaching over 258,000 customers. This growth is driven by strong net additions and significant AI adoption, as highlighted in the latest earnings call. Despite macroeconomic uncertainties and a slight dip in average subscription revenue per customer, HubSpot's strategic focus on AI and a $500 million share repurchase program underscore confidence in sustained growth and innovation.

Data provided by:

Main Street Data

HubSpot Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: -6.58%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive sentiment overall, with strong revenue and customer growth, significant advancements in AI adoption, and a new share repurchase program signaling confidence. However, challenges such as macroeconomic uncertainty and some declines in average subscription revenue per customer were noted.

Q1-2025 Updates

Positive Updates

Revenue Growth

Q1 2025 revenue grew 18% year-over-year in constant currency, demonstrating strong financial performance.

Customer Growth

Total customers grew by 19% to over 258,000 globally, fueled by over 10,000 net customer additions in the quarter.

AI Adoption and Innovation

Copilot adoption has accelerated, with users more than doubling to over 660,000. Customer Agent adoption has doubled in three months, serving over 2,500 customers with high resolution rates.

Share Repurchase Program

HubSpot's Board of Directors authorized a $500 million share repurchase program, indicating confidence in the business outlook.

Upmarket and Downmarket Expansion

Large deal growth was strong, up 23% year-over-year, with partners contributing significantly with co-selling up 41%.

Negative Updates

Macroeconomic Uncertainty

Uncertainty remains a constant, with a heightened focus on value from customers, impacting business trends.

Average Subscription Revenue Per Customer Decline

Average subscription revenue per customer was $11,000 in Q1, down 2% year-over-year in constant currency and 4% on an as-reported basis.

Net Revenue Retention

Net revenue retention was 102% in Q1, down two points sequentially as expected.

Company Guidance

During HubSpot's Q1 2025 earnings call, the company provided guidance for both the second quarter and full fiscal year. For Q2, HubSpot anticipates total as-reported revenue to fall between $738 million and $740 million, representing a 16% year-over-year growth rate in both constant currency and as-reported terms. The non-GAAP operating profit is expected to be within $124 million to $125 million, translating to a 17% operating margin. The diluted net income per share on a non-GAAP basis is projected to range from $2.10 to $2.12, based on 53.2 million diluted shares. For FY 2025, HubSpot forecasts total as-reported revenue between $3.036 billion and $3.044 billion, marking a 16% year-over-year growth rate. The non-GAAP operating profit is expected to reach between $558 million and $562 million, with an 18% operating margin. The non-GAAP diluted net income per share is expected to range from $9.29 to $9.37, assuming 53.3 million diluted shares. HubSpot plans to repurchase up to $500 million of shares over the next year, reflecting confidence in its long-term growth opportunities. Additionally, the company maintains that CapEx will be about 5% of revenue and forecasts free cash flow of approximately $570 million for the year, with stronger cash flow expected in Q4.

HubSpot Financial Statement Overview

Summary

HubSpot is showing strong financial performance with significant revenue and free cash flow growth. Positive net income and improved leverage metrics indicate effective financial management. Continued focus on improving operating margins could further enhance profitability and shareholder value.

Income Statement

Positive

HubSpot demonstrates strong revenue growth, evidenced by a 21.06% increase from 2023 to 2024, and consistent gross profit margins above 80%. However, its EBIT and EBITDA margins remain negative, indicating ongoing operating challenges. The company also transitioned to positive net income in 2024, reflecting improved profitability.

Balance Sheet

Positive

HubSpot maintains a healthy equity position with a debt-to-equity ratio of 0.39 in 2024, showcasing strong leverage management. The equity ratio is stable at 50.27%, ensuring asset coverage. Return on Equity improved significantly to 2.76% with the positive net income, though still low within the software industry.

Cash Flow

Very Positive

The company's free cash flow grew by 123.67% from 2023 to 2024, indicating robust cash generation. The operating cash flow to net income ratio of 11.35 in 2024 highlights strong cash conversion efficiency. Free cash flow to net income is also favorable, supporting financial flexibility.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.63B	2.17B	1.73B	1.30B	883.03M
	Gross Profit
2.23B	1.82B	1.42B	1.04B	716.07M
	EBIT
-67.60M	-208.06M	-109.10M	-43.54M	-50.83M
	EBITDA
146.00M	-81.23M	-38.53M	-228.00K	-4.57M
	Net Income Common Stockholders
4.63M	-176.29M	-112.75M	-77.84M	-85.03M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.07B	1.39B	1.41B	1.20B	1.25B
	Total Assets
3.80B	3.07B	2.54B	2.17B	1.97B
	Total Debt
745.42M	787.81M	806.34M	712.97M	788.62M
	Net Debt
232.75M	399.83M	475.32M	335.95M	410.50M
	Total Liabilities
1.89B	1.75B	1.55B	1.30B	1.21B
	Stockholders Equity
1.91B	1.32B	992.22M	873.80M	762.65M
Cash Flow		Free Cash Flow
560.66M	250.72M	181.40M	176.86M	30.04M
	Operating Cash Flow
598.60M	350.97M	273.17M	238.73M	88.91M
	Investing Cash Flow
-515.86M	-334.77M	-319.66M	-179.51M	-215.57M
	Financing Cash Flow
53.49M	37.01M	7.43M	-51.47M	222.46M

HubSpot Technical Analysis

Technical Analysis Sentiment

Negative

Last Price616.92

Price Trends

50DMA

595.89

Positive

100DMA

658.66

Negative

200DMA

625.42

Negative

Market Momentum

MACD

6.29

Positive

RSI

48.08

Neutral

STOCH

7.39

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HUBS, the sentiment is Negative. The current price of 616.92 is below the 20-day moving average (MA) of 638.34, above the 50-day MA of 595.89, and below the 200-day MA of 625.42, indicating a neutral trend. The MACD of 6.29 indicates Positive momentum. The RSI at 48.08 is Neutral, neither overbought nor oversold. The STOCH value of 7.39 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HUBS.

HubSpot Risk Analysis

HubSpot disclosed 58 risk factors in its most recent earnings report. HubSpot reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 2 New Risks

We are subject to risks associated with our strategic investments, including partial or complete loss of invested capital. Significant changes in the fair value of this portfolio, including changes in the valuation of our investments in privately held companies, could negatively impact our financial results. Q4, 2024

Adverse litigation results could affect our business. Q4, 2024

HubSpot Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BSY	81 Outperform	$14.67B	61.45	25.20%	0.52%	10.71%	-27.64%
BL	71 Outperform	$3.44B	25.36	44.83%	―	8.93%	102.77%
FRSH	71 Outperform	$4.39B	―	-6.85%	―	20.46%	39.37%
HUBS	70 Neutral	$32.51B	7,452.21	-1.34%	―	19.17%	83.20%
SPT	63 Neutral	$1.25B	―	-36.95%	―	17.79%	16.49%
Sector *	61 Neutral	$11.51B	10.19	-6.93%	2.94%	7.57%	-9.20%

* Technology Sector Average

Performance Comparison

HUBS

HubSpot

616.92

10.66

1.76%

BlackLine

55.05

7.31

15.31%

SPT

Sprout Social

21.44

-11.09

-34.09%

BSY

Bentley Systems

47.93

-2.04

-4.08%

FRSH

Freshworks

14.99

1.83

13.91%

HubSpot Corporate Events

Executive/Board ChangesStock BuybackFinancial Disclosures

HubSpot Announces Leadership Change and Share Buyback

Positive

May 8, 2025

On May 6, 2025, Brian Halligan resigned as Executive Chairperson of HubSpot‘s Board of Directors, transitioning to a non-executive director role, while Lorrie Harrington became the new Chairperson. The same day, HubSpot’s Board authorized a $500 million share repurchase program over 12 months. HubSpot reported Q1 2025 financial results with a 16% revenue increase to $714.1 million and a 19% growth in customer base. Despite a GAAP net loss of $21.8 million, non-GAAP net income rose to $95.9 million. The company anticipates continued growth, projecting a 16% revenue increase for Q2 and the full year 2025.

Executive/Board Changes

HubSpot Approves Executive Severance Plan for 2025

Neutral

Apr 11, 2025

On April 10, 2025, HubSpot‘s Board of Directors approved an Executive Severance Plan to provide severance payments and benefits to its CEO and other named executive officers in the event of a qualifying termination. This plan, effective until April 10, 2028, outlines specific compensation and benefits during and outside of a change in control period, impacting the company’s executive management structure and potentially influencing stakeholder confidence.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.