Evercore ISI Reiterates In Line Rating on HubSpot Inc (HUBS)

Evercore ISI analyst Kirk Materne reiterated an In Line rating and $550.00 price target on HubSpot Inc (NYSE: HUBS).

The analyst comments "We had a chance to attend HubSpot’s Inbound conference/Analyst Day in Boston yesterday and wanted to share some of our key takeaways. At a high level, the event was largely centered around AI, with the company announcing Breeze, its AI platform that includes copilots (formerly ChatSpot), Agents, as well as Breeze Intelligence centered around data enrichment. Similar to other vendors, HubSpot is embedding AI across the platform with features across every single hub and expects to capture value over time as customers realize the value on their end, namely through the upgrade motion as full functionality will exist in upper tier editions. Breeze Intelligence, the data enrichment part of the solution will also have a consumptive element whereby ‘capacity packs’ will be sold in bundles of 100, 1k, or 10k and consumed as needed. On the financial side, the key metric was the 20-22% FY27 operating margin target as compared to the 18-20% FY26 target. Additionally, the LT operating margin guide was raised to 25% from the 20-25% prior range as HUBS expects to continue to drive leverage with scale, particularly in the S&M line item. Bottom line: While a relatively minor update from a margin perspective, we believe the modest ~2.5% raise to the LT target at the midpoint demonstrates management’s commitment to driving greater efficiency at scale and the FY27 target offers another benchmark by which to measure progress along the journey. The key question for the stock simply remains when we could see a bottoming in subscription growth and NRR and whether the new AI features can help spur more migrations to higher end SKU’s. We believe this likely remains a debate into early CY25 but between ‘de-risked’ 2H estimates and a solid uplift in op. margins, we believe the downside risk is fairly limited – outside of a broader pullback in software."

For an analyst ratings summary and ratings history on HubSpot Inc click here. For more ratings news on HubSpot Inc click here.

Shares of HubSpot Inc closed at $503.76 yesterday.

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