Mizuho Starts HubSpot Coverage With Bullish Rating, Spots 'Buying Opportunity'

HubSpot Inc HUBS seems well-positioned to gain share in a large target market and generate sustainable growth, according to Mizuho.

The Analyst

Mizuho’s Siti Panigrahi initiated coverage of HubSpot with a Buy rating and a price target of $205.

The Thesis

HubSpot is poised to benefit from the adoption of cloud-based solutions for customer relationship management (CRM) by small and medium businesses, Panigrahi said in the initiation note.

He added that HubSpot enjoys a strong position in this market, given its best-of-breed CRM suite, has been exhibiting strong execution and faces significant cross-sell and upsell opportunities, which could add an estimated $250 million to the company’s 2020 revenue.

HubSpot’s target addressable market is large, estimated at around $30 billion, and the company “continues to expand its penetration with new hubs (product segments), a bundled suite, and moving up-market,” the analyst wrote.

Panigrahi expects HubSpot to surpass the consensus estimate of 24% growth in 2020. He added that the recent pressure on HubSpot’s shares due to mixed third-quarter results, “represents a buying opportunity.”