HubSpot Inc. (HUBS:NYE) Analysts raise targets on better-than-expected earnings

HubSpot Inc Stock Forecast:

According to 22 analysts, HubSpot Inc is expected to have an average target stock price of USD 396.71 within the next year, and the average analyst rating for the stock is Strong Buy. However, Stock Target Advisor‘s own analysis suggests that the stock is slightly bearish based on 4 positive signals and 5 negative signals. As of the last closing, HubSpot Inc’s stock price was USD 361.93, which represents a change of +0.91% over the past week, +14.64% over the past month, and -33.32% over the last year.

Analysts Coverage Change:

  • Piper Jaffray Companies maintains an “Overweight” rating for HubSpot Inc. and raises the price target to USD 450 from USD 350.
  • Raymond James maintains a “Strong Buy” rating and raises the price target to USD 500 to USD 360.
  • Credit Suisse Group maintains an “Outperform” rating and raises the price target to USD 480 from USD 400.
  • Needham & Company maintains a “Buy” rating and raises the price target to USD 470 from USD 380.
  • Mizuho Securities maintains a “Buy” rating and raises the price target to USD 450 from USD 350.

HubSpot Inc. News:

HubSpot Inc. (HUBS:NYE) experienced a significant surge in its stock price during after-hours trading on Thursday, as it announced better-than-expected results for its fourth quarter, including an adjusted earnings per share and revenue that exceeded Wall Street forecasts.

Despite challenging economic conditions that arose in 2022, the company reported a loss of $15.6 million (equivalent to 32 cents per share) for the quarter, which was an improvement compared to the same period in the previous year when it suffered a loss of $16.4 million (35 cents per share). Adjusted for one-time expenses, the company’s earnings per share were $1.11, while its revenue increased by 27% to reach $469.7 million, driven by a subscription revenue of $458.2 million. Analysts had expected the company to report an adjusted earnings per share of 83 cents and revenue of $446 million, according to FactSet.

HubSpot expects its revenue for the first quarter of the year to be in the range of $473 million to $475 million, with adjusted earnings per share between 82 and 84 cents, which is also higher than FactSet’s forecast. For the full year, the company anticipates sales between $2.050 billion and $2.060 billion, and adjusted earnings per share between $4.24 and $4.32.

Despite ending the regular trading day with a 1.5% decline, the stock’s positive after-hours performance suggests investor confidence in the company’s strong results.

Positive Fundamentals :

HubSpot Inc. is a large company in its sector with a high market capitalization, indicating a level of stability. The stock has also demonstrated superior risk-adjusted returns compared to its peers over a hold period of at least 12 months, placing it in the top quartile. Additionally, the company has had positive total cash flow over the past four quarters, indicating good financial health.

Furthermore, the company has a high Gross Profit to Asset Ratio, which is a popular metric among value investors for showing superior long-term returns. This places the stock in the top quartile compared to its peers. The Gross Profit to Asset Ratio measures the company’s ability to generate profits from its assets, which is an important factor in evaluating a company’s financial performance.

Overall, these factors suggest that HubSpot Inc. is a well-managed and financially healthy company, which is likely to perform well in the long run. However, it is important to note that investing always involves some level of risk, and investors should conduct their own research and analysis before making any investment decisions.

Negative Fundamentals:

HubSpot Inc. stock has a few key issues that investors may want to consider before investing in the company.

Firstly, the stock is highly volatile and has generated above-median returns in the past five years. This suggests that there is a high level of risk associated with investing in HubSpot Inc. stock, and investors need to have a high risk tolerance to invest in such a stock.

Secondly, the stock is overpriced compared to its peers based on its price to book value and price to cash flow ratios. This means that the stock is trading at a premium compared to its industry peers, which could make it more vulnerable to price corrections.

Thirdly, HubSpot Inc. has a high level of leverage compared to its sector peers. This means that the company has a significant amount of debt relative to its equity, which can increase the risks associated with investing in the company.

Finally, the company has had negative total free cash flow in the most recent four quarters, which could suggest that it is facing challenges generating enough cash from its operations to fund its growth initiatives.

FA Score (Fundamental Analysis):

The fundamental analysis of HubSpot Inc. is “Slightly Bearish” with a FA score of 4.4 out of 10, where 0 is very bearish and 10 is very bullish.

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