What happened
Shares of HubSpot (HUBS -2.40%) charged sharply higher Monday, jumping as much as 7%. As of 12:21 p.m. ET, the stock is still up 2.3%.
The catalyst that sent the inbound marketing and customer relationship management (CRM) specialist higher was a positive note from a Wall Street analyst.
So what
Jefferies analyst Samad Samana issued positive commentary on HubSpot ahead of the company's fourth-quarter and full-year financial report, which is scheduled to be released on Thursday, Feb. 10, after the market close.
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The analyst maintained his buy rating and an $800 price target on the stock, which suggests potential upside of more than 69% for investors over the coming year.
Samana is expecting "solid" fourth-quarter results from HubSpot and is "confident" the company's subscription revenue growth will exceed his target of 42%. The analyst came to this conclusion after channel checks in the fourth quarter and in the early weeks of 2022. Samana also noted receiving positive and constructive feedback from HubSpot's partners, according to a report by The Fly.
The analyst acknowledged that this is a high hurdle and that the company faces obstacles, including foreign currency headwinds and difficult comps as a result of HubSpot's impressive performance to close out 2020, which was marked by subscription revenue that grew 35%.
Now what
Samana went a step further, saying that he believes HubSpot will issue guidance for subscription revenue growth above 30% in 2022, which will put it ahead of analysts' consensus estimates.
HubSpot's stock was crushed during the recent rout of tech and high-growth stocks, with shares down more than 44% from their high. Yet even after that drubbing, the stock isn't cheap when measured using traditional metrics. It has a valuation of 19, when a reasonable a price-to-sales ratio is generally considered to be between 1 and 2.
That said, by expanding into adjacent businesses, HubSpot has increased its total addressable market (TAM) to an estimated $87 billion. Considering its 2020 revenue of just $883 million, the company has a long and potentially lucrative road ahead.
