UBS upgrades HubSpot as it sees long-term upside after 35% drop in shares

Investing.com -- UBS upgraded HubSpot Inc (NYSE: HUBS) to "Buy" from "Neutral," saying the recent selloff has created an attractive entry point for the high-quality software firm, even as a near-term macro uncertainty lingers.

The stock has fallen 35% since mid-Feb. and now trades at 9x expected 2025 revenue, whch is below its two-year average of 11x.

UBS sees this as a compelling valuation for a company with underappreciated growth drivers and a conservative FY25 outlook that is less likely to require material revisions.

“We spot an opportunity,” UBS analysts wrote, pointing to HUBS’ move upmarket, increased adoption of multiple hubs amid vendor consolidation, and a pricing model shift that could lift revenue and net revenue retention in 2025.

The bank trimmed its 2025 revenue growth estimate to 15.5% from 16.5%, in line with company guidance, while assuming some short-term disruption in small and mid-sized business demand.

“We’re prudently assuming some deal delays/disruption ahead as some SMBs enter wait/see mode,” UBS noted, citing modestly lengthening deal cycles following recent tariff news.

Still, partners remain cautiously optimistic, with many expecting 2025 growth to match or exceed 2024 levels.

UBS highlighted early signs of momentum in larger deals and services adoption, as well as potential long-term benefits from AI offerings like Prospecting Agent and Content Agent, though these are not expected to materially impact revenue until FY26.

Despite near-term headwinds, UBS believes the stock’s current valuation, trading at a 2x premium to SMID-cap software peers versus a historical 4x premium, reflects an attractive risk/reward setup.

The firm sees HubSpot well positioned to resume durable growth if macro conditions stabilize.

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