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Macquarie’s Steve Koenig sees multiple upside revenue drivers, including improved net expansions, a pricing model change, and a greater focus on landing new large customers.
Shares of customer relationship management (CRM) platform company HubSpot, Inc. (HUBS) received a bullish recommendation from Wall Street on Monday.
Macquarie analyst Steven Koenig initiated coverage of HubSpot stock with an ‘Outperform’ rating and a $730 price target, implying roughly 17% upside potential.
The analyst said the Cambridge, Massachusetts-based company’s status as one of the fastest-growing top 10 CRM vendors is due to its competitive differentiation based on unified marketing, selling, service and commerce capabilities for the two to 2,000-employee segment.
"With its small but expanding share (2%) of a $106B CRM market that IDC forecasts to grow at a 14% compound annual growth rate (CAGR) through 2027E, the company looks poised for sustained above-market growth for the next several years," he added.
Koenig views HubSpot’s investment positives as outweighing the negatives. He sees multiple drivers for meaningful revenue upside, including net expansion improvement, a pricing model change and a greater focus on landing new large customers.
The analyst believes that progress toward achieving meaningful upside relative to the initial fiscal year 2025 guidance will be adequate to drive stock outperformance.
Looking ahead, the firm said increased visibility toward fiscal year 2025 revenue and earnings per share (EPS) growth will likely serve as upside catalysts.
On the other hand, weaker macroeconomic conditions, impacting small and medium business (SMB) demand will likely pose risk, it added.
On Stocktwits, sentiment toward HubSpot stock fell to ‘neutral’ by the end of Monday’s session from the ‘bullish’ a day ago. The message volume on the stream was ‘extremely low.’
HubSpot ended Monday’s session up 3.40% at $626.90 amid the broader market recovery. However, the stock has lost over 10% for the year-to-date period.
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