HubSpot provided better-than-expected guidance for the first quarter and 2021.
Courtesy HubSpot
HubSpot stock soared Friday after the customer-relationship-management software company posted blowout results for the fourth quarter, triggering a flurry of analyst upgrades, increased price targets, and general investor enthusiasm.
For the quarter, HubSpot (ticker: HUBS) posted revenue of $252.1 million, up 35% from a year ago, and well ahead of the Wall Street analyst consensus at $236.7 million. Non-GAAP earnings were 40 cents a share, likewise well ahead of consensus at 23 cents.
HubSpot stock on Friday surged17% to $504.29. The stock has quintupled from its March 2020 lows of a little under $100 a share.
Guidance also surpassed previous expectations. The company, which provides marketing, sales, content management, and customer service software, sees first-quarter revenue of $260 million to $265 million, with non-GAAP profits of 28 to 30 cents a share. Street consensus had been $245 million in revenue and per-share earnings of 28 cents. For the full year, HubSpot sees revenue of $1.16 billion to $1.17 billion, with earnings of $1.51 to $1.59 a share, ahead of the previous Street forecast of $1.06 billion in revenue and $1.38 a share in profits.
“During the quarter we surpassed 100,000 total customers, and in December we crossed $1 billion in annual recurring revenue—two great milestones that reflect the determination of our team and the strength of our customer relationships,” CEO Brian Halligan said in a statement.
The Street is going gaga over the earnings report, which is in contrast to analysts’ expectations for disaster as the Covid-19 pandemic emerged last spring.
Mizuho analyst Siti Panigrahi raised his rating on Friday to Buy from Neutral, with a new target of $526, up from $360. The analyst writes that he had been concerned about growth earlier in the year, but the quarter erased his worries: “35% growth in Q4 with guidance of 32% growth in 2021 against 30% growth in 2020 …has alleviated our concern,” he writes. “HubSpot is a significant beneficiary of an accelerated digital transformation trend, and is executing to its product expansion strategy, which should help drive long-term sustainable growth and margin expansion.”
Raymond James analyst Brian Peterson ups his rating to Strong Buy from Outperform, with a new target price of $725, up from $365. “We simply can’t ignore our confidence in HubSpot’s product portfolio and market opportunity to modernize B2B selling motions, which should experience significant investments over the next decade,” he writes.
Stifel analyst Tom Roderick writes that the company’s results were “nothing short of remarkable.”
“Consider this,” Roderick writes. “Back in March 2020, when it seemed as though the SMB segment was headed straight off a cliff, HubSpot briefly traded below $100 a share …Instead of facing a long winter of SMB malaise, HubSpot is clicking on all cylinders.” He repeats his Buy rating, and takes his target to $550, from $400.
Write to Eric J. Savitz at [email protected]
