tiprankstipranks
HubSpot: Is Another Blockbuster Quarter in the Offing?
Stock Analysis & Ideas

HubSpot: Is Another Blockbuster Quarter in the Offing?

The acceleration in digital transformation initiatives amid the COVID-19 pandemic has significantly boosted demand for HubSpot’s (HUBS) cloud-based customer relationship management (CRM) platform.

Despite easing pandemic-led restrictions, the demand for its offerings accelerated in Q1 of this year, with its revenues recording a 41% jump over the prior-year period. While HubSpot’s Q1 impressed, will the momentum sustain in Q2?

HubSpot is slated to announce its Q2 financials after the closing bell on Wednesday, Aug. 4. Looking ahead, Guggenheim analyst Kenneth Wong reiterated his Buy rating on the stock. 

In a report to investors, Wong said, “We hosted an Elite Tier Hubspot Partner that engages primarily with midmarket businesses. Our speaker indicated that the pandemic-fueled surge in demand has sustained through the 1H of the year. The partner saw meaningfully higher 2Q sequential growth than in 1Q (~10%), which was already above expectations.” (See HubSpot stock charts on TipRanks)

This is important, as the Solutions Partners are service providers who promote the HubSpot brand and offer its CRM Platform to their clients. Furthermore, Solutions Partners and customers referred by them accounted for approximately 35% of the company’s total customer base in 2020 and generated nearly 43% of its total sales. Therefore, the acceleration in growth at the agencies of the Solutions Partners indicates more businesses are adopting HubSpot’s CRM Platform. 

Additionally, the KOL (key opinion leader) indicated that the “synergy and connectivity between multiple HubSpot hubs” and its “functionality and value proposition” is drawing migrating merchants to HubSpot’s platform, which is encouraging. Furthermore, the company’s focus on partner initiatives, including the new commission structure, has made it easier for Solutions Partners to sell multiple HubSpot hubs. 

With the sustained momentum in the first half of the year, HubSpot’s top-line could continue to grow rapidly in Q2. 

Overall, HubSpot stock has a Strong Buy consensus rating based on 14 Buys and 2 Holds. With over 168% growth in its stock in one year, the average HubSpot price target of $589.42 implies 1.4% downside potential from current levels. 

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles