Analysts Give A Thumbs Up To HubSpot As It Takes Moats Over Margins

Analysts Give A Thumbs Up To HubSpot As It Takes Moats Over Margins
  • Various analysts attended HubSpot, Inc's HUBS user conference and analyst day in Boston and came back with a positive take on the stock.
  • Raymond James analyst Brain Peterson reiterated his Strong Buy rating and slashed the price target to $360 from $440. 
  • The shares retreated mainly on a below consensus 2023 margin outlook and cautious indications regarding NRR despite several updates on key growth drivers and product updates. 
  • However, he remained bullish on the company's long-term innovation cadence, with product depth in growth areas like CRM/Service and payments continuing to impress. 
  • Given the company's long runway for growth, consistent innovation, and market leadership position in the mid-market, he found it worthy of a premium.
  • Needham analyst Ryan Macdonald reiterated a Buy and a $500 price target reflecting his additional confidence in the company's organic product development and GTM strategies post the event.
  • He expects vendors like HubSpot further to accelerate their market share gains in a down economy as they can continue to outpace their competitors with sales and marketing investments. 
  • Shares traded down intraday when the company issued dismal margin guidance, which he believes highlights their desire to maintain these investments in sales and products, but will likely also prove conservative.
  • Mizuho analyst reiterated a Buy and $410 price target, reflecting his increased confidence in HubSpot's long-term strategy to become a connected front-office platform for SMBs.
  • He noted that HubSpot's growing and underpenetrated TAM, particularly in the mid-market, coupled with sustained product innovation, should continue to deliver a durable growth trajectory. 
  • He also expects the connected platform to drive multi-hub adoption further. 
  • Payments, while expected to contribute modestly in 2023, provide HUBS with yet another long-term growth driver. 
  • While the margin guidance is disappointing, he believes the company can deliver 2023 revenue growth ahead of consensus.
  • RBC Capital analyst Rishi Jaluria reiterated an Outperform and $500 price target reflecting his bullishness on the long-term story.
  • The encouraging data points offset the dismal margin guidance and cautious NRR commentary.
  • Price Action: HUBS shares traded higher by 2.12% at $298.49 on the last check Thursday.
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