JPMorgan cuts HubSpot stock price target to $775 from $850

On Friday, JPMorgan analysts maintained an Overweight rating on HubSpot Inc (NYSE:HUBS) shares but lowered the price target to $775 from $850. The adjustment follows HubSpot’s first-quarter performance, where revenue topped consensus at $714 million, representing an 18% growth in constant currency (CC) terms. According to InvestingPro data, HubSpot maintains impressive gross profit margins of 84.83% and has achieved a 19.17% revenue growth over the last twelve months, with a current market capitalization of $34.76 billion. This slight growth was affected by the lapping of an extra leap year day in the first quarter of 2024. Operating income was reported to be in line or slightly above consensus.

For the second quarter, HubSpot guides revenue between $738 and $740 million, surpassing the consensus of $725 million, with operating income expectations in line with predictions. For the fiscal year 2025, the company has raised revenue guidance by approximately $50 million, attributing most of this hike to favorable foreign exchange movements. InvestingPro analysis reveals that analysts expect the company to be profitable this year, with an EPS forecast of $9.43 for FY2025. Subscribers can access 8 additional exclusive ProTips and comprehensive financial metrics through the Pro Research Report.

Billing growth remained consistent at 20% in USD, which would adjust to 18% in CC terms. However, after accounting for duration and leap year effects, as well as the wind-down of the legacy Clearbit business, the growth rate normalizes back to 20%. HubSpot has sustained a steady billings growth trajectory over the past four quarters, despite constraints from slower new net annual recurring revenue (NNARR) growth and the law of large numbers.

Remarkably, reported performance obligations (RPO) growth accelerated to 37% in the first quarter, up from a last twelve months (LTM) average of 31%. This growth is seen as a positive indicator of bookings performance, especially with larger businesses signing multi-year contracts.

HubSpot’s commentary on the macro environment indicated no significant changes through April, although there is a noted increase in customer focus on value. The company reported strong momentum and growth in large deals, maintaining a steady pace of growth conversations. However, it acknowledged the highly uncertain environment and is closely monitoring trends.

In summary, JPMorgan’s analysts express optimism for HubSpot’s long-term business prospects, citing its multi-modal product portfolio and pace of innovation. They anticipate some near-term variability in demand and elevated deal scrutiny as companies slow tech investments. Despite these short-term fluctuations, HubSpot is viewed as an attractive multi-year compounder with a differentiated product vision and positive ecosystem feedback. The Overweight rating is maintained while the December 2025 price target is adjusted to $775. InvestingPro data indicates that HubSpot is currently trading above its calculated Fair Value, with analyst targets ranging from $535 to $980. The company maintains a "GOOD" Financial Health score of 2.79, operating with a moderate level of debt and strong cash flow generation.

In other recent news, HubSpot Inc. reported its first-quarter 2025 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $1.78, slightly above the forecast of $1.77. The company’s revenue reached $767 million, surpassing the expected $699.88 million, marking an 18% year-over-year increase. HubSpot’s customer base expanded by 19%, reaching 258,000, indicating strong demand for its offerings. Despite these positive metrics, the stock experienced a decline in after-hours trading, influenced by broader market concerns about future growth and macroeconomic uncertainties.

Evercore ISI analyst Kirk Materne raised the price target for HubSpot to $700 from $610, maintaining an In Line rating, following the company’s solid first-quarter performance. Materne noted the promising growth in HubSpot’s AI-infused products, with attach rates tripling year over year, and highlighted the company’s plans to introduce a hybrid pricing model for its Agentic AI platform. HubSpot’s full-year revenue guidance is set between $3.036 billion and $3.044 billion, with a projected EPS of $9.29 to $9.37, suggesting continued growth. The company emphasized its commitment to AI integration across its platform, with strategic acquisitions like Frame.ai and DashWorks to accelerate its roadmap.

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