HubSpot Earnings: Customer Additions Remain Robust Even As Upgrade Pressure Persists

We are maintaining our fair value estimate of $610 per share after narrow-moat HubSpot reported good first-quarter results. Guidance was mixed relative to our expectations, with full-year revenue maintained and non-GAAP operating profits raised. The most immediately impactful takeaway from the call was that the stronger environment experienced in the fourth quarter has retreated to the cautious backdrop we saw throughout 2023. We view the outlook as several offsetting factors that do not have a material impact on our long-term assessment. We continue to view HubSpot as well-positioned in the midmarket for marketing and sales automation software, with an expanding and powerful portfolio, and a robust growth profile coupled with solid execution. After months of being overvalued, we now see the stock as undervalued.