Let's talk about the popular HubSpot, Inc. (NYSE:HUBS). The company's shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$581 at one point, and dropping to the lows of US$468. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether HubSpot's current trading price of US$493 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at HubSpot’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What Is HubSpot Worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 12% below my intrinsic value, which means if you buy HubSpot today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $562.39, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since HubSpot’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from HubSpot?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. HubSpot's earnings over the next few years are expected to increase by 79%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? HUBS’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on HUBS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example - HubSpot has 1 warning sign we think you should be aware of.
If you are no longer interested in HubSpot, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
What are the risks and opportunities for HubSpot?
Trading at 14.9% below our estimate of its fair value
Earnings are forecast to grow 58.66% per year
Shareholders have been diluted in the past year
Significant insider selling over the past 3 months
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.