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Investing.com - Needham has reiterated its Buy rating on HubSpot Inc (NYSE:HUBS) with a price target of $900.00 following the company’s second-quarter performance. According to InvestingPro data, HubSpot, currently trading at $492.62, maintains impressive gross profit margins of 84.55% and has demonstrated solid revenue growth of 19% over the last twelve months.
HubSpot delivered what Needham described as a "solid Q2" with revenue exceeding expectations by 300 basis points. Foreign exchange movements accounted for approximately 70 basis points of this outperformance. The company’s strong performance is reflected in its $25.98 billion market capitalization, though InvestingPro analysis indicates the stock is currently trading near its Fair Value.
The company reported more normalized patterns around seat upgrades as customers have adapted to the new pricing model. The elimination of seat minimums has led to healthier upgrade patterns, according to Needham’s analysis.
HubSpot is now implementing a credit system to charge for agent usage, with the number of customers utilizing agents continuing to grow. The upcoming Inbound event is expected to provide customers with opportunities to learn more about agent use cases.
For fiscal year 2025, HubSpot’s guidance remains conservative with a $44 million increase that incorporates the $15 million second-quarter beat and foreign exchange tailwinds. Needham noted that macroeconomic headwinds were less prominent in discussions this quarter, with HubSpot’s growth outperforming competitors. InvestingPro reveals strong analyst consensus with a bullish 1.46 rating, while the company maintains a "FAIR" overall financial health score. Subscribers can access 8 additional ProTips and comprehensive financial metrics in the full Pro Research Report.
In other recent news, HubSpot reported strong financial results for the second quarter of 2025, exceeding both earnings and revenue forecasts. The company achieved an earnings per share of $2.23, surpassing the expected $2.12, and reported revenue of $760.9 million, which was higher than the anticipated $739.35 million. Wolfe Research maintained its Outperform rating with a $655 price target, highlighting HubSpot’s 19% year-over-year revenue growth and operating income of $129 million. Piper Sandler upgraded HubSpot from Neutral to Overweight, raising the price target to $675, following a $22 million revenue beat in the second quarter. Meanwhile, UBS adjusted its price target for HubSpot to $700 from $820, citing valuation concerns amidst a 25% decline in share price since mid-May. Despite these concerns, UBS maintained a Buy rating on the stock. These developments come amid a period of negative sentiment towards AI-related software-as-a-service companies and specific challenges for HubSpot in the SEO and CRM sectors.
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