HubSpot Bears The Brunt Of Macro Uncertainty: Analyst Sees Lower Billings

Keybanc Capital Markets analyst Michael Turits reiterated the Overweight rating on HubSpot, Inc. HUBS, lowering the price target to $593 from $660.

Turits lowered 2024/2025 estimates following the third quarter HubSpot Elite partner conversations that weakened relative to the analyst's second quarter checks and partner conversations he had at the Inbound conference in September.

Most partners cited macro-market uncertainty, the analyst noted.

Sales cycles indicated still long or even lengthening due to macro and more complex and up-market deals, Turits added.

While the pipeline build is strong, the analyst cautioned of risk to second-half bookings/billings given business trends and has lowered both the fourth quarter and 2024 billings estimates. 

The analyst lowered CY23 billings to $2.246 billion from $2.256 billion.

Turits lowered CY24 billings to $2.722 billion from $2.771 billion.

The analyst reduced CY25 billings to $3.328 billion from $3.372 billion.

The analyst also flagged increasing competition as HubSpot moves upmarket, projecting potential issues gaining traction on its full CRM suite (Sales, Marketing, CMS, Service, and now Operations and Payments).

Based on this, the analyst lowered CY24 revenue to $2.563 billion from $2.592 billion, CY24 EBIT to $394 million (15.4% margin) from $398 million (15.4% margin), and CY24 EPS to $6.79 from $6.85. 

For CY25, Turits reduced revenue estimates to $3.127 billion from $3.164 billion, EBIT to $528 million (16.9% margin) from $533 million (16.9% margin), and EPS to $8.86 from $8.95. 

HUBS Price Action: HubSpot shares were trading higher by 0.42% to $471.11 on the last check Tuesday. 

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Photo: Courtesy HubSpot