Shares of HubSpot Inc (NYSE: HUBS) have already more than doubled this year, but RBC Capital Markets’ Rishi Jaluria is convinced the stock is not out of juice yet.
Jaluria reiterated his “outperform” rating on HUBS this morning with a price target of $925 that represents a 15% upside from here.
Jaluria expects HubSpot to report strong Q3 results
The RBC analyst expects HubSpot to report strong results for its fiscal Q3 on November 3rd, which could boost the stock in the near term.
The current guidance is for HubSpot to report a 4.9% revenue growth in the third quarter. Historically, however, the software company has noted an average of 8.7% growth in its 3Q revenue over the past three years.
HubSpot has already raised its full-year guidance twice this year, but Jaluria is confident that there’s still more “upside to 2021 numbers”.
Jaluria sees strong demand for HubSpot in 2022
Over the longer term, he said the consensus for 28% growth next year looks “conservative” as discussions with channel partners indicate demand will remain strong in 2022.
Jaluria sees HubSpot as a “multi-product platform” with a strong financial profile and opportunities for margin expansion. Other reasons he likes the software company include “larger deals with customers” that are helping it beat the likes of CRM and ADBE in mid-market. The analyst wrote:
HubSpot trades at 25x EV/CY22E revenue, while our $925 price target implies 28x multiple, a premium to the peer group we believe is warranted based on HubSpot’s market opportunity and strong execution.
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