HubSpot (HUBS) AI Stock Analysis

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HubSpot

(NYSE:HUBS)

72Outperform

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.

Positive Factors

Artificial Intelligence

HubSpot's AI strategy, which deflects over 30% of service tickets, provides a competitive edge and supports a healthier long-term growth trajectory.

Management and Strategy

Investors are expected to return to HubSpot due to its best-in-class portfolio and management team, which are well-positioned to emerge stronger than peers from macro challenges.

Pricing Model and Revenue

The recent pricing model change is expected to positively impact net revenue retention, with many customers transitioning to the new model, benefiting profit margins.

Negative Factors

Deal Push and Performance

A push out of deals is anticipated to negatively impact HubSpot's Q2 performance.

Inventory and Tariff Risks

Partners exposed to clients with tariff risk and inventory concerns suggest more acute revisions to the full-year outlook as cash is being repurposed to buy excess inventory.

Net New ARR Growth

HubSpot's 2Q24 was its most challenging quarter for net new ARR growth due to macro pressures and headwinds from its new pricing model.

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

Market Cap

$32.10B

Dividend YieldN/A

Average Volume (3M)717.37K

Price to Earnings (P/E)7173.5

Beta (1Y)1.43

Revenue Growth21.07%

EPS GrowthN/A

CountryUS

Employees8,246

SectorTechnology

Sector Strength62

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.09

Shares Outstanding52,153,076

10 Day Avg. Volume703,052

30 Day Avg. Volume717,370

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)12.03

Price to Cash Flow (P/CF)40.70

P/FCF Ratio40.70

Enterprise Value/Market Cap1.08

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit15.55

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$778.88

Price Target Upside27.18% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering29

HubSpot Business Overview & Revenue Model

Company DescriptionHubSpot, Inc. provides a cloud-based customer relationship management (CRM) platform for businesses in the Americas, Europe, and the Asia Pacific. The company's CRM platform includes marketing, sales, service, and content management systems, as well as integrated applications, such as search engine optimization, blogging, website content management, messaging, chatbots, social media, marketing automation, email, predictive lead scoring, sales productivity, knowledge base, commerce, conversation routing, video hosting, ticketing and helpdesk tools, customer NPS surveys, analytics, and reporting. It also offers professional services to educate and train customers on how to leverage its CRM platform, as well as phone and/or email and chat-based support services. The company serves mid-market business-to-business companies. HubSpot, Inc. was incorporated in 2005 and is headquartered in Cambridge, Massachusetts.

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

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 customer base has shown consistent growth, reaching 248,000 by the end of 2024. The latest earnings call underscores this trend, highlighting a significant expansion with over 9,800 net additions in Q4 alone. This growth is fueled by strong AI adoption, particularly in Content and Service Hubs, which is enhancing customer value. However, challenges such as a slight decline in average subscription revenue per customer and foreign exchange impacts could affect future profitability. Overall, HubSpot's strategic focus on AI and customer expansion positions it well for continued growth in 2025.

Data provided by:

Main Street Data

HubSpot 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. 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
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

Technical Analysis Sentiment

Positive

Last Price612.43

Price Trends

50DMA

617.51

Negative

100DMA

676.90

Negative

200DMA

608.90

Positive

Market Momentum

MACD

-5.24

Negative

RSI

58.09

Neutral

STOCH

94.82

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HUBS, the sentiment is Positive. The current price of 612.43 is above the 20-day moving average (MA) of 548.53, below the 50-day MA of 617.51, and above the 200-day MA of 608.90, indicating a neutral trend. The MACD of -5.24 indicates Negative momentum. The RSI at 58.09 is Neutral, neither overbought nor oversold. The STOCH value of 94.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
BSY	79 Outperform	$13.15B	60.02	24.39%	0.57%	10.15%	-28.62%
PYCR	74 Outperform	$4.09B	―	-1.66%	―	15.72%	74.59%
HUBS	72 Outperform	$32.10B	7,173.54	0.29%	―	21.07%	―
BL	67 Neutral	$2.98B	21.21	45.56%	―	10.74%	200.08%
FRSH	64 Neutral	$4.27B	―	-8.63%	―	20.79%	32.50%
SPT	59 Neutral	$1.23B	―	-39.88%	―	21.66%	8.66%
Sector *	59 Neutral	$10.72B	10.37	-6.60%	3.02%	7.37%	-11.29%

* Technology Sector Average

Performance Comparison

HUBS

HubSpot

612.43

-23.73

-3.73%

BlackLine

46.85

-13.43

-22.28%

SPT

Sprout Social

21.07

-30.96

-59.50%

BSY

Bentley Systems

43.12

-10.16

-19.07%

PYCR

Paycor HCM

22.49

4.87

27.64%

FRSH

Freshworks

14.13

-4.29

-23.29%

HubSpot Earnings Call Summary

Earnings Call Date:Feb 12, 2025

(Q4-2024)

% Change Since: -22.03%|

Next Earnings Date:May 08, 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.

Q4-2024 Updates

Positive Updates

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.

Negative Updates

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 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.