HubSpot (HUBS): Valuation Check as New Contract Wins Reinforce Billings Growth and Revenue Momentum

HubSpot (HUBS) is back in focus after a run of new contract wins that are helping keep billings growing near 20%, reinforcing expectations for roughly mid teens revenue growth over the next year.

See our latest analysis for HubSpot.

The stock’s recent contract driven narrative contrasts with its share price performance. The latest close is $392.47, and the year to date share price return is a sharp negative 43.73% after a weak 90 day stretch. However, the three year total shareholder return of 25.17% still shows that longer term holders remain ahead, suggesting near term momentum has faded even as the growth story stays intact.

If HubSpot’s volatility has you rethinking concentration risk, this could be a good moment to explore high growth tech and AI stocks and see what else is setting up for the next leg higher.

With the stock down sharply this year yet still growing revenue at a healthy clip and trading at a sizable discount to analyst targets, is HubSpot quietly becoming a buy, or is the market simply pricing in tomorrow’s growth today?

Most Popular Narrative: 33% Undervalued

With HubSpot’s fair value estimate sitting well above the last close, the most widely followed narrative argues the market is discounting future earnings power too heavily.

The analysts have a consensus price target of $695.33 for HubSpot based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $910.0, and the most bearish reporting a price target of just $589.88.

Read the complete narrative.

Curious what kind of revenue runway, margin lift, and long term profit multiple could justify that upside case, even after recent target cuts and macro jitters? Dive in to see the assumptions powering this valuation debate.

Result: Fair Value of $585.47 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside depends on HubSpot navigating AI disruption in core marketing and proving it can consistently monetize its new agent based products.

Find out about the key risks to this HubSpot narrative.

Build Your Own HubSpot Narrative

If this view does not line up with yours or you would rather dig into the numbers yourself, you can build a complete narrative in under three minutes: Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding HubSpot.

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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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