Has the Recent 24% Drop Made HubSpot a Bargain in 2025?

• Wondering if HubSpot's current share price means opportunity, risk, or a bit of both? You are not alone, especially with so much talk swirling around its value these days.
• The stock has seen a wild ride lately, with shares down 10.3% over the last week and a sharp drop of 24.3% in the past month. This puts its year-to-date returns at -49.0% and a 52.1% slide over the past year.
• Much of this recent volatility has been linked to broader sell-offs across tech stocks and sector rotation as risk appetite shifts, alongside heightened concerns around future SaaS spending. These headlines have added fuel to the debate about where HubSpot should be trading right now.
• Right now, HubSpot scores a 5 out of 6 on our main valuation checks, suggesting it is undervalued on almost every measure we track. Let us walk through how those traditional valuation techniques stack up before sharing an even more insightful lens at the end of the article.

Find out why HubSpot's -52.1% return over the last year is lagging behind its peers.

Approach 1: HubSpot Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates HubSpot's value by projecting its future cash flows and discounting them back to their value today. This approach provides a forward-looking measure of intrinsic value based on what the business is expected to earn.

Currently, HubSpot generates Free Cash Flow of around $553.8 Million. Analysts provide estimates out to 2029, with Free Cash Flow expected to grow steadily to about $1.38 Billion by that year. After 2029, Simply Wall St extrapolates the next five years and expects FCF to rise above $2.3 Billion by 2035, reflecting a consistent upward trend from both analyst and internal projections. All cash flow figures are reported in $.

Based on these projections, the DCF model gives HubSpot an intrinsic value of $588.14 per share. This implies the stock is trading at a 39.6% discount to its calculated fair value, making it look undervalued relative to its fundamentals according to this approach.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests HubSpot is undervalued by 39.6%. Track this in your watchlist or portfolio, or discover 927 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for HubSpot.

Approach 2: HubSpot Price vs Sales

The Price-to-Sales (P/S) ratio is a popular metric for valuing companies like HubSpot that are still scaling profitability but have strong top-line growth. For fast-growing SaaS businesses, sales often provide a more consistent indicator of potential value than earnings, which can be volatile or negative during periods of heavy reinvestment.

Markets typically reward companies with higher sales growth, greater margins, and less risk by assigning them a higher P/S multiple. In this context, it is useful to compare a company’s P/S ratio against both the industry average and similar peers, but it is just as important to consider unique company factors that can justify deviations from the norm.

At the moment, HubSpot trades on a P/S ratio of 6.23x. This is higher than the Software industry average of 4.55x but well below the peer average, which is 10.87x. Simply Wall St introduces a proprietary “Fair Ratio,” currently calculated at 10.68x for HubSpot. This Fair Ratio represents the multiple the company should command after factoring in aspects like forward sales growth, profitability, margins, market cap, and business risks. Unlike a raw peer or industry comparison, the Fair Ratio adjusts for nuances specific to HubSpot, offering a more tailored assessment of fair value.

Comparing HubSpot’s actual P/S ratio of 6.23x to its Fair Ratio of 10.68x suggests the stock is undervalued based on this approach.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1430 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your HubSpot Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives.

A Narrative is simply your investment story—your perspective on where a company like HubSpot is headed, why, and how those expectations translate into a financial forecast and, ultimately, a fair value estimate.

Rather than just crunching numbers, Narratives invite you to combine company news, risks, and opportunities into your own outlook, linking your story directly to assumptions about future revenue, profits, and margins. This allows you to see how those factors flow through to fair value.

This approach is easy and accessible through Simply Wall St’s Community page, already used by millions of investors. Here, you can view and create Narratives for any stock including HubSpot.

With Narratives, you can confidently decide whether to buy or sell by comparing your calculated Fair Value to the current share price. Your view will be automatically updated in response to new earnings, product launches, or market-moving news.

For example, among HubSpot Narratives right now, some investors forecast a bullish fair value of $910 per share based on strong AI-driven growth, while others see more caution and set their fair value at $589, reflecting competitive and macroeconomic risks.

Do you think there's more to the story for HubSpot? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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