When Can We Expect A Profit From HubSpot, Inc. (NYSE:HUBS)?

HubSpot, Inc. (NYSE:HUBS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. HubSpot, Inc., together with its subsidiaries, provides a cloud-based customer relationship management (CRM) platform for businesses in the Americas, Europe, and the Asia Pacific. With the latest financial year loss of US$176m and a trailing-twelve-month loss of US$36m, the US$27b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on HubSpot's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for HubSpot

Consensus from 29 of the American Software analysts is that HubSpot is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$89m in 2026. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 46% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of HubSpot's upcoming projects, however, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 29% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of HubSpot which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at HubSpot, take a look at HubSpot's company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:

1. Valuation: What is HubSpot worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether HubSpot is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on HubSpot’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.