- Wondering whether HubSpot's current share price lines up with its underlying value, or if the recent weakness has opened up an opportunity for you?
- HubSpot now trades at US$245.14 after a 3.1% gain over the last 7 days, set against a 17.3% decline over 30 days and a 35.9% drop year to date, with a 50.8% slide over the past year.
- These moves sit against a backdrop of ongoing interest in software and customer relationship tools, with investors weighing how much they are prepared to pay for growth oriented names. Even without fresh earnings headlines, sentiment around revenue focused software platforms continues to shape how quickly share prices reset when expectations shift.
- On Simply Wall St's 6 point valuation framework, HubSpot scores 4 out of 6. The next sections will compare what different valuation methods say about this stock, before finishing with a way to look beyond the numbers to understand what that valuation really means for you.
Find out why HubSpot's -50.8% return over the last year is lagging behind its peers.
Approach 1: HubSpot Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model takes projected future cash flows and discounts them back to today using a required rate of return. The aim is to estimate what the business might be worth right now based on those future streams of cash.
For HubSpot, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow stands at about $597.6 million. Analysts provide detailed estimates for the next few years, and Simply Wall St then extends those projections further, with free cash flow for 2030 projected at about $2.2b, all kept in $ terms for consistency.
When those projected cash flows are discounted back to today, the resulting intrinsic value estimate is $865.35 per share. Compared with the current share price of $245.14, the DCF output indicates the stock is 71.7% undervalued based on these assumptions and inputs.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests HubSpot is undervalued by 71.7%. Track this in your watchlist or portfolio, or discover 62 more high quality undervalued stocks.
Approach 2: HubSpot Price vs Sales
For a company like HubSpot that is heavily focused on growing its revenue base, the P/S ratio is a useful way to think about valuation because it relates the share price directly to the sales the business is generating, regardless of where current earnings sit.
In practice, investors tend to accept a higher or lower P/S depending on what they expect for future growth and how risky they see the business. Strong expected growth and perceived resilience often support a higher multiple, while slower growth or higher risk usually pull a “normal” or “fair” P/S lower.
HubSpot currently trades on a P/S of 4.13x. That sits above the broader Software industry average of 3.64x, but below the peer group average of 5.53x. Simply Wall St also calculates a proprietary “Fair Ratio” for HubSpot of 7.34x. This metric aims to capture what a reasonable P/S could look like after considering factors such as earnings growth, profit margins, the Software industry context, company size and specific risks. This gives you a more tailored benchmark than a simple peer or industry comparison. On this framework, HubSpot’s current 4.13x P/S is materially below the 7.34x Fair Ratio, which indicates that the shares may be trading at a discount on a sales basis.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your HubSpot Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives take the story you believe about HubSpot, connect it to specific forecasts for revenue, earnings and margins, and turn that into a Fair Value that you can compare to the current share price in a simple, visual way on the Simply Wall St Community page. Narratives are updated automatically as new news or earnings arrive, and views can range widely, for example from a more cautious HubSpot Fair Value of about US$329.51 to a more optimistic view near US$735.17. This gives you a clear sense of how different assumptions about multi hub adoption, AI monetization or profitability translate into different Fair Values and therefore into different decisions about whether today’s price looks high, low or roughly in line with your own view.
Do you think there's more to the story for HubSpot? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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