Update: HubSpot Jumps on Impressive Guidance

(Published Sept. 27)

Recent Stirling addition HubSpot (HUBS) wowed analysts and attendants at Tuesday’s user conference.

HubSpot was our latest trade idea, as we recommended a long position on Sept. 24.

The company announced increased guidance for revenue and earnings for the third quarter of 2017.

Total revenue is expected to be in the range of $95.9 million to $96.9 million, an increase from the previously-announced guidance of $92.8 million to $93.8 million. Non-GAAP operating losses are expected to be $1.2 million to $2.2 million, a major improvement from the previous midpoint of a $4 million loss. That translates to a loss of $0.02 to $0.04 per share, rather than a loss of $0.08 to $0.10.

This is a huge stride toward more consistent bottom-line profitability for HUBS.

The company also introduced major updates to its upsales, adding the Sales Professional tier, which the company outlined offering the following benefits to sales executives and managers:

Save time and work smarter with smart e-mail templates, document tracking and automated meeting calendar functionality.

Connect with more of the right prospects using web chat, predictive lead scoring and automated e-mail sequences.

Manage a sophisticated sales process with advanced deal and task automation tools and robust team management features.

Analyze sales performance and understand what is working using custom dashboards and reporting features.

Furthermore, HUBS announced an integration with high-flyer Shopify. HUBS users can now integrate Shopify data into the HubSpot Platform.

This is in addition to the new HubSpot Customer Hub that will enable sales and service teams to:

Keep a pulse on customer happiness with automated customer feedback and net promoter score (NPS).

Easily identify and respond to issues using sentiment analysis and churn forecasting.

Automate customer testimonial captures from your most loyal and happy customers.

Help customers help themselves with a robust knowledge center.

Multiple analysts raised their price targets on the stock in response to Tuesday’s news.

Of note, Oppenheimer raised its Outperform target to $82 and Bank of America announced a new $92 target.

We believe these new products will result in additional increases to HubSpot’s top and bottom lines over the next several quarters.

While our 3-to-6 month target remains $86, we are increasing our 12-month target from the $95 to $100 range to $100 to $105, reflecting the increased revenue guidance from management.


Since its inception on July 5, recommended stocks by Stirling Strategic Investor have returned 6.62% by Sept. 11 vs. the S&P return of 3.32%.

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