What happened

HubSpot (NYSE:HUBS) shares rallied 14.2% in January, according to S&P Global Market Intelligence. Shares significantly outperformed the SPDR S&P 500 Trust ETF, which fell slightly, and Technology Select Sector SPDR ETF, which was up 4% in January. The company didn't report any significant news in January, but Wall Street analysts did boost their price targets last month following better-than-expected Q3 2019 results in early November.

So what

A software-as-a-service technology company, HubSpot markets a platform of tools that help small and midsize businesses improve their marketing, sales, and customer service.

A man sitting in a yoga pose as paper money falls down around him.

Image source: Getty Images.

On Nov. 5, HubSpot reported third-quarter revenue of $173.6 million, up 32% year over year, and adjusted net income of $15.1 million or $0.32 per diluted share, up from $7.4 million or $0.17 per diluted share in Q3 2018. The results beat industry watchers' estimates by $4.8 million and $0.08 per share, respectively.

The solid performance resulted in Q4 2019 guidance for revenue of at least $180.3 million and non-GAAP (adjusted) earnings per share of at least $0.40. For the full year, guidance was set for sales over $669 million and non-GAAP EPS of over $1.44. If HubSpot delivers on its full-year outlook, it would mean year-over-year growth of 30.4% and 61.8%, respectively.

HubSpot's strength led to Wall Street analysts upping their share price targets last month. On Jan. 10, Mizuho Securities started coverage at a buy with a price target of $205. Morgan Stanley lifted its price target to $182 from $176 on Jan. 13. RBC upped its target to $215 From $190 on Jan. 27.

Now what

By developing a software platform that incorporates marketing, sales, and customer service, HubSpot's been able to expand its target market. Over the past five years, revenue has increased at a compounded annual rate of 42%; exiting the third quarter, its customer count totaled 68,803, up 31% from the year before. We'll find out if the company's momentum continued in the fourth quarter when management reports results on Feb. 12.