HubSpot Inc HUBS plummeted nearly 3 percent Tuesday on a new short report by Citron Research, which forecasted a 34-percent near-term decline and a 67-percent long-term fade from $75 to $25.
“At BEST this can be valued at Constant Contact whose takeout price would put HUBS valuation at $27,” Citron’s Andrew Left wrote in the report.
Left considers HubSpot a “low hanging fruit” to suffer the profit-favoring market rotation. His valuation factors in a lack of pricing power, transparency and intellectual property; a decline in U.S. growth and business partners; a management exodus; and a broken business model.
The marketing and sales software platform is also facing competition from the likes of Alphabet Inc GOOGL and Facebook Inc FB.
“At best, HubSpot is worth SaaS [software as a service] comps,” Left wrote. “We give it the benefit of the doubt and give it take-out valuations… Hubspot is more in line with a content marketing company whose takeout valuations are 2x revenue.”
Depending on perspective, Left considers HubSpot worth, at most, $57, although likely lower than $30.
At time of publication, shares had largely recovered to trade at $76.95, down about 1.3 percent off the open. LEft will appear on Bloomberg TV Tuesday afternoon to further discuss his call.
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