Wednesday - Scotiabank (TSX:BNS) analyst Nick Altmann increased the price target on shares of HubSpot Inc (NYSE:NYSE:HUBS) shares to $825 from the previous $700, while maintaining the company's Sector Outperform rating. This target falls within the broader analyst range of $635-$880, according to InvestingPro data.
The adjustment follows positive feedback from discussions with Elite HubSpot partners, which revealed a solid fourth-quarter performance characterized by larger deal sizes and sustained interest in multi-hub deals. The company, now valued at $36.2 billion, has demonstrated impressive momentum with a 25.86% return over the past year.
Altmann's confidence in HubSpot's status as a leading software asset is bolstered by the expectation of continued growth in deal sizes and an increasing move upmarket as indicated by the partners' pipelines for the calendar year 2025.
The company's strong market position is supported by its impressive 84.66% gross profit margin and sustained revenue growth of 21.78% over the last twelve months, as revealed by InvestingPro's detailed financial analysis. Despite the mixed response to HubSpot's Breeze platform, with limited activity in the fourth quarter and low expectations for its growth contribution in the coming year, the overall outlook from partners remains optimistic.
The partners' constructive feedback is a key factor in Altmann's positive outlook for HubSpot. The analyst pointed out that the company's shares have already performed well, with a 20% increase in the calendar year 2024, and the expectation is that the positive momentum will persist. This is attributed to the enduring secular trends within the software industry and HubSpot's ability to capitalize on them.
Altmann's report underscores the significance of HubSpot's partner network in driving the company's success. The Elite partners' experiences and projections provide a window into the company's operational performance and future potential. With the larger deal sizes and multi-hub deals, HubSpot seems well-positioned to continue its growth trajectory.
In summary, Scotiabank's revised price target reflects a belief in HubSpot's ongoing potential to perform strongly in the market. The firm's Sector Outperform rating remains unchanged, signaling continued confidence in HubSpot's business model and market position.
While InvestingPro's Fair Value model suggests the stock is currently trading above its Fair Value, analysts expect the company to become profitable this year, with an EPS forecast of $8.27 for 2024. For deeper insights into HubSpot's valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, HubSpot has made significant strides in its operations. The company has reported robust revenue growth of 21.78% and notable gross profit margins of 84.66%.
HubSpot has completed the acquisition of Frame AI, a company specializing in AI-powered conversation intelligence. This acquisition is expected to enhance HubSpot's ability to transform unstructured customer data into actionable insights, thereby improving customer experience and business growth.
Analysts from RBC (TSX:RY) Capital Markets, BofA Securities, Truist Securities, and Stifel have all shown confidence in HubSpot's strategic direction. RBC Capital Markets has maintained an Outperform rating for the company, raising the price target to $825. BofA Securities has raised its price target for HubSpot to $850, citing the company's potential within the CRM industry.
Truist Securities continues to back HubSpot with a Buy rating and a $750.00 price target. Stifel has also lifted its price target for HubSpot to $880, based on positive product updates.
Moreover, HubSpot has announced the resignation of its Chief Legal Officer, Alyssa Harvey Dawson, effective December 31, 2024, with a transition plan in place until March 1, 2025. These are among the recent developments for HubSpot, as the company continues to focus on strategic initiatives aimed at driving future growth.
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