BofA Names HubSpot Top Software Stock: Here's Why

HubSpot Inc HUBS is a top pick when considering the 4Ms of market, moat, management, and margins, according to BofA Securities.

The HubSpot Analyst: Brad Sills initiated coverage of HubSpot with a Buy rating and a price target of $600.

The HubSpot Thesis: HubSpot addresses a total addressable market estimated at more than $86.7 billion, Sills said in the initiation note.

The company has “a combined market share of only 1% in these markets,” but has a “formidable competitive moat,” which stems from a large installed base of more than 103,000 customers and a “robust partner network of hundreds of digital marketing agencies and a large inbound sales organization,” the analyst said. He added that the HubSpot suite spans marketing, sales, service, and CMS.

Given all these factors, Sills believes HubSpot is “well-positioned to continue gaining share in the vast SMB front office applications industry” and has a “long runway for 25%+ revenue growth.”

HubSpot is “a top pick in our coverage universe and in the large cap group,” he further wrote.

HUBS Price Action: Shares of HubSpot had declined by 2.67% to $500.48 at the time of publication Friday.

(Photo: HubSpot)