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HubSpot (HUBS)
NYSE:HUBS
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HubSpot
(NYSE:HUBS)
74Outperform
Positive Factors
Financial Performance
HubSpot delivered strong first-quarter results with constant-currency revenue growth of 18%, above its guidance of 15%.
Growth Initiatives
Execution was solid with HubSpot delivering on its key growth initiatives of more platform adoption, AI innovation, upmarket expansion, and acquisition.
Market Position
HubSpot's platform solution is expected to benefit from IT vendor consolidation tailwinds as customers increasingly focus on cost savings with bundled solutions, providing an opportunity to prove more durable than peers.
Negative Factors
Customer Usage
There is a sharper-than-expected downtick in Net Revenue Retention with a notable reduction in customer usage.
Guidance
A softer 1Q beat and no raise to FY guide was likely below expectations considering HUBS's strong beat & raise track record.
Valuation
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. S&P 500 (SPY)
Market Cap
$33.47B
Dividend YieldN/A
Average Volume (3M)714.05K
Price to Earnings (P/E)7452.2
Beta (1Y)1.43
Revenue Growth19.17%
EPS Growth83.20%
CountryUS
Employees8,574
SectorTechnology
Sector Strength65
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.78
Shares Outstanding52,636,288
10 Day Avg. Volume613,947
30 Day Avg. Volume714,054
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.04
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit15.55
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$762.04Price Target Upside26.36% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering28
HubSpot Business Overview & Revenue Model
Company DescriptionHubSpot, Inc. is a leading provider of cloud-based software solutions designed to empower businesses with tools for inbound marketing, sales, customer service, and customer relationship management (CRM). Founded in 2006 and headquartered in Cambridge, Massachusetts, HubSpot serves a diverse range of industries, enabling companies to attract visitors, convert leads, and close customers through its integrated suite of applications. The company's core products include Marketing Hub, Sales Hub, Service Hub, CMS Hub, and Operations Hub, all of which are built on a single, extensible platform.
How the Company Makes MoneyHubSpot generates revenue primarily through a subscription-based model, where customers pay recurring fees to access its software products and services. The company's key revenue streams include subscription fees for its various hubs (Marketing, Sales, Service, CMS, and Operations), which are offered at different pricing tiers to cater to businesses of all sizes. Additionally, HubSpot makes money from professional services, such as onboarding, training, and consulting, which help customers maximize their use of the platform. The company also benefits from strategic partnerships with agencies and third-party developers who contribute to its ecosystem by building integrations and extensions, thereby enhancing the value proposition of HubSpot's offerings.
HubSpot Key Performance Indicators (KPIs)
Any
Total Customers
Indicates the overall scale of HubSpot's user base, reflecting market penetration and potential for upselling and cross-selling opportunities.
Indicates the overall scale of HubSpot's user base, reflecting market penetration and potential for upselling and cross-selling opportunities.
Data provided by:
Main Street Data
Main Street DataHubSpot Financial Statement Overview
Summary
HubSpot shows strong financial performance with significant revenue and free cash flow growth. Positive net income and improved leverage metrics indicate effective financial management. The company should focus on improving operating margins to enhance profitability and shareholder value.Income Statement
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
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.75
Cash Flow
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.―
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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 | ||||
| 129.23M | -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
Negative
603.05
Price Trends
595.92
Positive
667.54
Negative
615.51
Negative
Market Momentum
14.79
Negative
50.15
Neutral
66.28
Neutral
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 603.05 is above the 20-day moving average (MA) of 590.21, above the 50-day MA of 595.92, and below the 200-day MA of 615.51, indicating a neutral trend. The MACD of 14.79 indicates Negative momentum. The RSI at 50.15 is Neutral, neither overbought nor oversold. The STOCH value of 66.28 is Neutral, 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 0 New Risks
HubSpot Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $13.25B | 60.58 | 25.20% | 0.54% | 10.71% | -27.64% | |
74 Outperform | $33.47B | 7,452.21 | -1.34% | ― | 19.17% | 83.20% | |
73 Outperform | $2.94B | 20.96 | 44.83% | ― | 8.93% | 102.77% | |
70 Neutral | $4.21B | ― | -6.85% | ― | 20.46% | 39.37% | |
66 Neutral | $1.21B | ― | -36.95% | ― | 17.79% | 16.49% | |
60 Neutral | $10.96B | 10.28 | -6.73% | 2.97% | 7.74% | -12.45% |
* Technology Sector Average
Performance Comparison
HUBS
HubSpot
603.05
5.26
0.88%
BL
BlackLine
53.23
-4.69
-8.10%
SPT
Sprout Social
23.90
-4.25
-15.10%
BSY
Bentley Systems
46.59
-7.96
-14.59%
FRSH
Freshworks
14.56
0.82
5.97%
HubSpot Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -8.68%|
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 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.
Spark’s Take on HUBS Stock
According to Spark, TipRanks’ AI Analyst, HUBS is a Outperform.
HubSpot receives a strong overall score due to its impressive financial growth, particularly in revenue and free cash flow. Positive earnings guidance and momentum in AI adoption further support the outlook. However, valuation concerns and mixed technical signals slightly offset these strengths.
To see Spark’s full report on HUBS stock, click here.
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.
Spark’s Take on HUBS Stock
According to Spark, TipRanks’ AI Analyst, HUBS is a Neutral.
HubSpot’s strong financial performance, particularly in revenue and cash flow growth, positively impacts its overall score. Earnings call insights further support growth, especially in AI initiatives. However, high valuation metrics and technical analysis indicating a bearish trend are significant concerns.
To see Spark’s full report on HUBS stock, click here.
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.