HubSpot: Valuation Is Cheap Relative To The Solid Growth Runway
Summarize this article with:
Value Sights310 FollowersFollow5ShareSavePlay(11min)CommentsSummaryHubSpot remains a buy as the Core Seat strategy and multi-hub adoption deepen platform integration and drive customer expansion.AI solutions, including Customer Agent and Prospecting Agent, are scaling rapidly, with strong adoption and heavy utilization supporting future growth.Enterprise wins, such as QS, and 35% y/y growth in large deals, demonstrate HUBS' traction beyond SMBs and support a positive growth outlook.Despite market concerns over guidance, HUBS trades at just 5.2x forward revenue, offering attractive rerating potential as execution remains solid.
Getty Images Investment action I had a buy rating for HubSpot (HUBS) previously as execution was solid, and I remained confident that a return to double-digit growth is possible. I am keeping a buy rating on HUBS because theThis article was written byValue Sights310 FollowersFollowI’m a fundamental, valuation-driven investor with a strong focus on identifying businesses that have the potential to scale over time and unlock massive terminal value. My investment approach centers around understanding the core economics of a business—its competitive moat, unit economics, reinvestment runway, and management quality—and how those factors translate into long-term free cash flow generation and shareholder value creation. I focus on fundamental research, and I tend to focus on sectors with strong secular tailwinds. Professionally, I am a self-educated investor that started this journey 10 years ago. Currently, I am managing my own funds, seeded from friends and family. My motivation for writing on Seeking Alpha is to share investment insights, and also at the same garner feedback from fellow investors in this site. My aim is to help readers focus on what truly drives long-term equity value. I believe good analysis should be both analytical and accessible, and I hope my work adds value to readers looking for high-quality, long-term investment opportunities.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Quick InsightsHow does the Core Seat strategy impact HUBS' customer expansion and platform stickiness?Core Seat lowers adoption barriers, embeds HUBS across more departments, and drives multi-hub adoption, increasing switching costs and making the platform more irreplaceable.What evidence supports AI as a real revenue driver for HUBS?Customer Agent and Prospecting Agent show rapid adoption and high utilization, with AI tools helping Sales Hub users win ~10% more deals and Customer Agent achieving a 60% resolution rate.Why does the current valuation present upside for HUBS despite market concerns?At 5.2x forward revenue, HUBS trades near Covid lows, while strong NNARR, billings, and multi-hub expansion suggest the 16% growth guide is beatable, supporting rerating potential.Recommended For You