Hubspot: UBS lowers PT to $700 from $820, maintains Buy rating.

Hubspot: UBS lowers PT to $700 from $820, maintains Buy rating.

UBS has lowered its price target for HubSpot Inc (NYSE: HUBS) to $700 from $820, while maintaining a Buy rating on the stock. The adjustment comes amid broader negative sentiment around AI-related software-as-a-service (SaaS) companies and rising company-specific concerns, including SEO changes and CRM competition [1].

HubSpot shares have declined approximately 25% since mid-May, falling more sharply over a longer period, with a 36% decline over the past six months [1]. Despite the price target cut, UBS noted that HubSpot's second-quarter key performance indicators (KPIs) were "better than feared," with 9,700 net customer additions and guidance for continued additions at the upper end of the 9,000-10,000 range in the second half of the year [1].

The firm highlighted a one-point improvement in net revenue retention driven by seat growth tailwinds, along with revenue acceleration to approximately 18% constant currency and duration-adjusted billings growth to about 19% constant currency, suggesting growth stability rather than further deceleration [1]. UBS maintained that HubSpot has "one of the better set-ups in SMID apps/SaaS" with improving KPIs and conservative estimates for the second half of 2025 and fiscal year 2026, valuing the company at 7x enterprise value to sales and 33x enterprise value to free cash flow on calendar year 2027 estimates [1].

HubSpot reported strong financial results for the second quarter of 2025, exceeding both earnings and revenue expectations. The company achieved an earnings per share (EPS) of $2.23, surpassing the forecasted $2.12, and reported revenue of $760.9 million, which was higher than the anticipated $739.35 million [2]. The revenue represented a 19% year-over-year growth, with an operating income of $129 million and a 17% margin, outperforming forecasts by $5 million [2].

Wolfe Research maintained its Outperform rating for HubSpot, setting a price target of $655.00, highlighting the company’s ability to address concerns about AI’s impact on search engine optimization [2]. Piper Sandler upgraded HubSpot’s stock from Neutral to Overweight, raising the price target to $675.00 from $645.00, based on signs of growth recovery following a challenging period for the company [2].

These developments indicate a strong financial position for HubSpot amid recent market challenges. Despite the price target cut, UBS maintained a Buy rating on the stock, valuing it at 7x enterprise value to sales and 33x enterprise value to free cash flow on calendar year 2027 estimates [1].

References:
[1] https://www.investing.com/news/analyst-ratings/hubspot-stock-price-target-lowered-to-700-by-ubs-on-valuation-concerns-93CH-4176098
[2] https://www.investing.com/news/analyst-ratings/hubspot-stock-rating-reiterated-at-buy-by-needham-on-solid-q2-results-93CH-4176235