Investing.com — HubSpot Inc. was provided with a boost Wednesday after analysts at Evercore ISI added the stock to their Tactical Outperform list, citing improving business conditions and a more attractive risk/reward profile.
“We believe that the risk/reward associated with HUBS has become more attractive at current levels,” Evercore ISI wrote, raising their price target to $610, which implies 15% upside from current levels.
The analysts noted that recent partner surveys suggest stabilization in HubSpot (NYSE:)’s business, with positive signs for pipelines, demand, and customer upgrades.
While they do not expect the company’s upcoming Q3 results and Q4 guidance to act as a major catalyst, Evercore ISI believes the “bottoming of revenue growth in F4Q/F1Q” along with steady margin improvements will create compelling upside over the next three to four months.
Evercore emphasized HubSpot’s conservative guidance practices, stating, “HUBS generally guides conservatively,” which might temper investor excitement in the near term.
However, the analysts see growth momentum building into 2025, with a shift toward agentic AI and pricing changes providing additional tailwinds.
The note highlighted several factors supporting their bullish view, including “a low bar to clear” for subscription revenue growth to meet Street estimates and the possibility of a technical breakout above $570.
Additionally, Evercore pointed to improved sentiment and favorable seasonality in the fourth quarter as contributing to potential gains.
At a current valuation of approximately 7.5x EV/CY26 sales, the firm said the stock appears more reasonably priced compared to historical levels, the analysts said.
Evercore’s price target of $610 represents the shares trading to 9x EV/CY26 sales.
Evercore concluded that HubSpot’s outlook is improving, with the potential for strong performance in early 2024 as the company capitalizes on new industry trends and business momentum.
