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Investing.com -- Piper Sandler upgraded HubSpot (NYSE:HUBS) to Overweight from Neutral after a stronger-than-expected second quarter, saying the software company is showing early signs of a product-led turnaround despite broad investor skepticism around growth-at-all-costs SaaS models.
The firm raised its price target to $675 from $645 given a better risk-reward outlook following a 40% drop in the stock since February.
HubSpot reported second-quarter revenue of $761 million, beating estimates by $22 million.
The firm noted about $5 million of that beat came from foreign exchange, but still called the results "better than feared" given recent doubts around customer growth and weakening traffic from search engines.
Piper pointed to a rebound in HubSpot’s core Americas market, where revenue growth picked up to 18.4% from 17.1% the prior quarter.
The company added 9,724 new customers, above its guidance, and showed gains in customer retention and multi-product adoption, with 42% of annual recurring revenue now coming from customers using three or more products.
Operating margin guidance for the second half was raised to 21%, another sign of what Piper sees as a coming rebound in both growth and profitability heading into 2026.
The next potential catalyst, according to Piper, will be HubSpot’s analyst day and user conference starting September 3 in San Francisco.