Few could have predicted the effects Marc Benioff would have on the tech industry when he left Oracle to found Salesforce (CRM -1.43%), the first software-as-a-service (SaaS) company revolving around customer relationship management (CRM).

So successful was Salesforce that it became an industry-leading company that later joined the Dow Jones Industrial Average. But despite that achievement, the CRM industry continues to innovate, which leaves plenty of opportunity for investor gains. Given its innovation and size, the CRM stock of the future just might be HubSpot (HUBS -3.46%).

HubSpot and CRM

CRM connects departments such as marketing, sales, and customer service. Under this cohesive system, departments could work together more easily and avoid redundant tasks, significantly increasing operational efficiency.

To be sure, Salesforce is a tough competitor, and its tool stands out for its granular forecasting. And HubSpot's $14 billion market cap is slightly above one-tenth of Salesforce's, a situation that could leave HubSpot vulnerable without a meaningful competitive advantage.

Fortunately, HubSpot has the attention of small and medium-sized businesses. It attracted this cohort with its "freemium" pricing model. Unlike Salesforce, it offers a level of service at no charge, bringing these clients into the HubSpot ecosystem. From there, it sells a premium package that adds functionality and drives revenue for the company.

Additionally, for marketing automation, HubSpot is the industry leader. According to Datanyze, it claims a 39% market share in marketing automation software. All other peers -- including Salesforce and Oracle -- had market shares in the single digits.

As of the end of the third quarter, HubSpot claimed almost 159,000 customers, a 24% increase year over year. Customers are also spending more on the platform, increasing their average subscription by 7% over the same period to more than $11,200.

HubSpot by the numbers

That increased use, along with the growing customer base, significantly boosted HubSpot's financials. In the first nine months of 2022, revenue came in at almost $1.3 billion, rising 35% compared with the same period in 2021. Still, both the cost of revenue and operating expenses increased at a faster rate than revenue, leading to a loss of $97 million in the first three quarters of 2022. In comparison, HubSpot lost $61 million during the same timeframe in 2021.

HubSpot also remains in the clutches of the bear market. Its stock dropped by close to 65% over the last year.

However, its price-to-sales (P/S) ratio now sits around 8. While that comes in significantly higher than Salesforce at 4 times sales, it is also the lowest sales multiple since the March 2020 sell-off in stocks. Such a move could indicate limited near-term downside for the CRM stock.

Consider HubSpot

With that historically low valuation, investors may want to buy hand over fist. Even though Salesforce may outperform HubSpot on granularity, the freemium approach did not impede paid subscription growth. HubSpot's lead in market automation should also hold it in good stead.

Moreover, investors should pay close attention to its growth potential. The smaller market cap implies more possible upside, increasing the likelihood of outsized investor profits over time.