Is Hubspot a buy?

Its time to talk about a not so popular name within the markets lately. Here is the breakdown on $HUBS otherwise known as Hubspot.


Current Price: $282.53

52/Wk High: $320.89

52/Wk Low: $90.835


Read below for the breakdown!


Hubspot is another big software and cloud name that has taken the market by storm. Hubspot offers tools for a variety of tasks.


Currently, Hubspot offers tools for social media marketing and web analytics all the way through to search engine optimization and landing pages.


The thesis on Hubspot is also similar to almost every peer in the space. Given that COVID-19 has created a boost in the shift to a digital economy and workplace, companies such as Hubspot should see massive growth.


When breaking down the numbers Hubspot continued to grow but given that the company is more exposed to small business, growth did slow minimally.


Digging into the last reported earnings $HUBS reported a Q2 beat, with an EPS of $0.34 versus the EPS consensus estimate of $0.24. Not only that but revenue continued to grow to $203.61 million.


Hubspot also continued to grow its total customers, seeing a whopping 34% growth. Given $HUBS massive growth, the company now has over 86,000 total customers.


Further exploring Hubspot’s financials the companies total debt level sits at $468 million when last reported, but maintains a solid cash on hand level of $1.136 billion as of June 30th.


On top of positive Q2 earnings, Hubspot management raised guidance for Q3 and the year. Management expects Q3 revenues to land within a range of $210 million to $211 million.


Secondly, management expects 2020 full-year revenues to sit between $828 million to $832 million.


Although earnings were positive analysts remain neutral on $HUBS. The average price target currently stands at $272.53/share, representing a -3.54% downside.


Secondly, the high price target is $328.00/share, representing a 16.09% upside and the low price target is $200.00/share, representing a -29.21% downside.


While the analysts are neutral the big money remains extremely bullish. Currently, 92.77% of $HUBS is institutionally owned. Top holders include Fidelity Management & Research, BlackRock Institutional Trust, and The Vanguard Group.


It is also important to note that Hubspot stock currently trades at price to sales ratio of 16.76 and a price to book value of 17.67 times.


Digging into the technicals, the charts seem to be flashing an opportunity after the most recent market correction.


According to the six-month $HUBS chart the RSI sits at 55.61, which is not an amazing location to start a position, but simply based on RSI is not bad.


On the otherhand, RSI is not the only factor when it comes to technicals and other factors must be taken into consideration. The six-month MACD sits within a range of 9.93 and 6.42, creating a medium downward momentum.


Finally, the six-month CCI sits at -42.93 and $HUBS stock currently trades roughly 34 points off its highs.


Overall, I am a fan of Hubspot in the long term. Given the consistent growth numbers, strength through COVID-19, and raised guidance I expect that Hubspot will continue growing in the long term.


On the otherhand, shares could get cheaper in the near term, depending on where the market moves within the next several months, which are typically very volatile ahead of an election.


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Disclaimer: This is not direct financial advice, simply opinion based on independent research. Luke Donay and Running With The Money are not responsible for any investment made based on the published information.