Market Overview

Bank Of America Raises HubSpot Price Target After Positive Channel Checks

Share:
Bank Of America Raises HubSpot Price Target After Positive Channel Checks

HubSpot Inc (NYSE: HUBS) could report healthy bookings growth and is likely to generate robust free cash flows in the long term, driven by sales productivity and ASP growth, according to one analyst.

The Analyst

Bank of America’s Brad Sills maintains a Buy rating on HubSpot, raising the price target from $180 to $185.

The Thesis

Talks with key ad agency and reseller partners indicate Q4 new account signings were in-line with or ahead of expectations. Channel checks didn’t suggest any macro weakness in North America or Europe, Sills said.

Agencies are beginning to sign onto HubSpot larger customers with 500 to 2,000 employees. Checks also indicate a slight increase in Enterprise upgrade activity ahead of the price increase. Sales Pro cross selling activity seems to have grown, backed by feature enhancements and partner experience.

Even conservative customer additions of 3,700 in Q4 suggests customer growth of 38 percent year over year. Sills expects 36-38 percent year-over-year subscription growth in Q4, which is higher the prior estimate of 32 percent.

“Partners noted that pipelines are strong for Q1 and 2019, driven by similar trends,” the analyst wrote in the note.

Looking at long-term FCF potential, HubSpot could achieve a CAGR of 54 percent, driven by sales productivity and ASP growth. In upside case, the estimate reaches 63 percent CAGR.

Price Action

Shares of HubSpot traded at $151.65 Wednesday afternoon.

Related Links:

51 Biggest Movers From Yesterday

Jefferies: 3 Software Players To Watch

 

Latest Ratings for HUBS

DateFirmActionFromTo
Sep 2019ReiteratesBuy
Sep 2019MaintainsOutperform
Sep 2019UpgradesSector PerformOutperform

View More Analyst Ratings for HUBS
View the Latest Analyst Ratings

Posted-In: BofA Merrill Lynch Brad SillsAnalyst Color Price Target Analyst Ratings Best of Benzinga

 

Related Articles (HUBS)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
YEXTMorgan StanleyMaintains15.0
WKMorgan StanleyMaintains42.0
RAMPMorgan StanleyMaintains58.0
PDMorgan StanleyMaintains34.0
HTHTDaiwa CapitalDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Blizzard Conditions, Heavy Snow From Cascades To The Plains

Analysts Bullish Following TD Ameritrade's Impressive Q1 Earnings