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HubSpot, Inc. (HUBS)
:HUBS
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HubSpot
(NYSE:HUBS)75Outperform
Positive Factors
AI Opportunities
HUBS is well positioned in the early stages of leveraging AI opportunities, which can drive greater seat adoption and edition upgrades over time.
Revenue Growth
HUBS reported revenue growth of 20% year-over-year, beating both estimates and consensus, supported by positive SMB sentiment and large deal momentum.
Negative Factors
NRR Deceleration
NRR decelerated to 101% in Q1FY24, from 110%+ in 2021 and 2022, driven by slightly higher churn, downgrades to lower volume tiers and editions and depressed upgrade activity.
HubSpot (HUBS) vs. S&P 500 (SPY)
Market Cap
$34.01B
Dividend YieldN/A
Average Volume (3M)599.65K
Price to Earnings (P/E)7461.7
Beta (1Y)1.45
Revenue Growth21.07%
EPS GrowthN/A
CountryUS
Employees8,246
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)0.09
Shares Outstanding52,153,076
10 Day Avg. Volume580,951
30 Day Avg. Volume599,646
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)12.94
Price to Cash Flow (P/CF)43.80
P/FCF Ratio43.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$887.64Price Target Upside38.65% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering26
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 Financial Statement Overview
Summary
HubSpot demonstrates 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
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.80
Positive
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
Positive
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.85
Very Positive
| 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
640.21
Price Trends
734.57
Negative
693.66
Negative
611.95
Positive
Market Momentum
-22.98
Positive
28.67
Positive
21.12
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 640.21 is below the 20-day moving average (MA) of 740.89, below the 50-day MA of 734.57, and above the 200-day MA of 611.95, indicating a neutral trend. The MACD of -22.98 indicates Positive momentum. The RSI at 28.67 is Positive, neither overbought nor oversold. The STOCH value of 21.12 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $69.06B | 129.65 | 6.15% | ― | 17.04% | -62.24% | |
78 Outperform | $193.43B | 36.22 | 36.31% | ― | 11.02% | 4.96% | |
75 Outperform | $34.01B | 7,461.66 | 0.29% | ― | 21.07% | ― | |
73 Outperform | $274.89B | 44.96 | 10.26% | 0.56% | 8.72% | 51.47% | |
71 Outperform | $178.62B | 124.35 | 16.53% | ― | 22.44% | -18.31% | |
66 Neutral | $71.69B | ― | -32.59% | ― | 23.19% | 11.01% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
HUBS
HubSpot
640.21
35.72
5.91%
ADBE
Adobe
449.40
-102.29
-18.54%
CRM
Salesforce
282.89
-20.69
-6.82%
WDAY
Workday
252.38
-11.94
-4.52%
NOW
ServiceNow
850.63
92.95
12.27%
TEAM
Atlassian
238.86
30.06
14.40%
HubSpot Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -18.50% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, operating margin improvements, and significant momentum in AI adoption, particularly in AI-powered features and customer base expansion. However, technical difficulties during the call and challenges such as a decline in average subscription revenue per customer and foreign exchange impacts were noted.Highlights
Strong Revenue Growth
Q4 revenue grew 20% year-over-year in constant currency, and full year 2024 revenue grew 21% in constant currency. Subscription revenue also saw a 21% year-over-year increase.
Operating Margin Improvement
Operating margin was 19% in Q4 and 17.5% for the full year, up 200 basis points year-over-year, reflecting balanced growth and profitability.
AI Momentum and Adoption
AI-powered features in Content Hub and Service Hub contributed to significant growth, with Content Hub attachment to Marketing Hub increasing from 13% to 54% and new Service Hub enterprise portals growing 100% quarter-over-quarter.
Customer Base Expansion
The customer base expanded to 248,000 customers globally with over 9,800 net customer additions in Q4.
Agent.AI User Growth
The user base of Agent.AI grew over 10x in six months, reaching over 500,000 users and empowering over 5,000 builders.
Lowlights
Technical Difficulties During Call
The earnings call experienced several technical difficulties, causing interruptions and necessitating repetition of parts of the presentation.
Average Subscription Revenue Per Customer Decline
Average subscription revenue per customer was $11,300 in Q4, down 1% year-over-year in constant currency.
Foreign Exchange Impact
FX had a 5 point headwind on as-reported billings growth and is expected to be a 200 basis point headwind to 2025 revenue growth.
Company Guidance
In the Q4 2024 earnings call, HubSpot provided robust guidance for 2025, projecting total revenue to reach between $2.985 billion and $2.995 billion, marking a 16% year-over-year increase in constant currency and 14% on an as-reported basis. The company anticipates a non-GAAP operating profit margin of 18% and non-GAAP diluted net income per share to range from $9.11 to $9.19, based on 53.9 million fully diluted shares. For Q1 2025, revenue is expected to grow 15% year-over-year in constant currency and 13% as reported, with a non-GAAP operating profit margin of 14%. Additionally, HubSpot expects free cash flow to be approximately $560 million for the full year, benefiting from seasonally stronger performance in Q1 and Q4. The guidance reflects continued momentum from their AI initiatives, with no direct agent monetization assumed for 2025, but a focus on leveraging AI to enhance customer value and expansion.HubSpot Corporate Events
Executive/Board Changes
HubSpot Announces Departure of Chief Legal Officer
Neutral
Dec 5, 2024
HubSpot, Inc. announced the resignation of Chief Legal Officer Alyssa Harvey Dawson, effective December 31, 2024, by mutual agreement with the Board. During a transition period until March 2025, Dawson will continue to receive her salary, equity vesting, and benefits. Post-transition, she will receive severance and COBRA reimbursement. This change is amicable, with no operational disagreements cited.
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.