HubSpot Pulls Back In Premarket As Analyst Downgrades Stock On Valuation Concerns: Retail Mood Mixed

synopsis

HubSpot, Inc. (HUBS) pulled back in Friday’s premarket trading after an analyst downgraded the stock and predicted a very modest gain for the next 12 months.  

Cambridge, Massachusetts-based HubSpot is a customer relationship management platform that helps businesses manage their customers, sales, marketing etc.

On Friday, TD Cowen analyst Derrick Wood downgraded HubSpot stock to ‘Hold’ from ‘Buy’ but revised up its price target to $725 from $680, TheFly reported. The revised price target suggests a merely 1.1% upside potential for the stock

Wood said the stock appeared to be fairly valued at current levels following its recent rally. The stock gained 20% in 2024 and tacked on another 3% so far in January. 

It received a shot in the arm early in December when the company announced an agreement to acquire artificial intelligence (AI)-powered conversation intelligence platform Frame AI.

Frame AI’s technology transforms unstructured data such as emails, calls, meetings, and conversations, into real-time insights and actionable recommendations.

HubSpot has since then completed the transaction.

TD Cown expects HubSpot’s growth to decelerate to the upper teens from 20%-plus growth. The firm also noted that its recent IT survey showed marketing technology spending slowing in 2025. Recent partner conversations suggested some potential disruption in the ecosystem, it added.

The firm’s action contrasted with Morgan Stanley analysts’ view that HubSpot shares trade at a valuation discount to peers. In a note released on Monday, the firm raised the price target for the stock to $835 from $747 and maintained a ‘Buy’ rating. 

The firm liked HubSpot because of its “best-in-class product for small business front office software.” Therefore, it added, the stock deserves a premium valuation.

HUBS sentiment and message volume January 17, 2025, premarket as of 5:46 am ET | Source: Stocktwits

On Stocktwits, sentiment toward HubSpot stock is ‘neutral’ (52/100), although it marked an improvement from the ‘bearish’ mood that was seen a day earlier. Retail chatter was muted, as reflected by the ‘normal’ message volume.

A retail watcher of the stock on the platform said he liked the stock due to its strong technicals, AI monetization opportunity, and the likelihood of attaining profitability next year.

Not all shared their optimism. A retailer saw HubSpot as a “bloated B2B software” stock that would crash if the market turned lower.

https://stocktwits.com/360sage/message/596450714

In premarket trading, the stock was down 0.80% at $711.60 as of 5:46 a.m. ET.

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