HubSpot Earnings: Value Proposition Shines With Another Good Quarter in Choppy Environment

Similar to last quarter, wide-moat HubSpot reported good results with both revenue and non-GAAP operating profit coming in above the high end of guidance. The 2023 outlook was raised on both the top and bottom lines. The firm’s high-value software helps attract free and low-price tier customers, while feature-rich offerings and multiple modules help drive upsells. This has been the case in recent quarters as well, and the value proposition and vendor consolidation available to mid-market clients was apparent, as macro uncertainty seems to benefit HubSpot relative to peers. We raised our near-term estimates, particularly on profitability, over the next several years, and as a result we are raising our fair value estimate to $445 per share, from $425 previously. We continue to view HubSpot as well positioned in marketing and sales automation software, with an expanding portfolio and a robust growth profile coupled with solid execution. With shares up nearly 50% since the beginning of the year, we now see shares as fairly valued.