HubSpot (NYSE:HUBS) price target was raised to $500 from $480 by BofA analysts, who also maintained a Buy rating on the stock in a note to clients on Thursday.
After speaking with key agency partners to gauge deal activity and pipeline builds, the analysts told investors that the firm expects healthy billings upside for the software company.
"Partners generally cited in line or better results in Q1, consistent with Q4. We did not note materially incremental positive or negative commentary," they wrote. "Areas of relative strength include 1) strength in new and Enterprise upgrade deals, with continued strength in the higher end of the targeted range of 20 – 2,000 employees, 2) new customer signings in core Marketing and Sales hubs largely holding with recent levels, and 3) cross sell of additional hubs, with Operations standing out incrementally more this quarter."
They added: "We expect subs rev and total billings growth of 23% y/y (26% cc) and 23% (26% cc), respectively, exceeding our base case for 20% (24%) and 20% (24%). Our upside case assumes 1) net adds of 6,400, down from 8,481 in Q4, 2) ASP growth of +3% y/y cc (0% reported), down from 9% cc in Q4 on a tougher compare (14% cc in 1Q22, vs. 12% in 4Q21) and 3) DR growth of 6% q/q, consistent with 1Q22. We assume 3pts FX headwind, below guidance for 4%, given favorable FX movement."
Meanwhile, BofA believes there is room for multiple expansion in the stock as revenue estimates move higher, toward 30% growth.