HubSpot (HUBS) Stock Forecast & Price Target

HubSpot demonstrates a positive financial outlook, highlighted by an increase in net revenue retention, which rose 200 basis points sequentially to 104%, driven by a new seat-based pricing model. Gross margins also exhibited strength, expanding by 100 basis points year-over-year to 86.7%, with subscription gross margin increasing to 88.2% and services margin significantly improving from -7.5% to 19.8%. Furthermore, the company's operational efficiency is evident, as it generated $194.1 million in operating cash flow, reflecting a notable margin increase to 27.6%, alongside achieving $158.5 million in free cash flow, up from $78.5 million the previous year.

The financial outlook for HubSpot is concerning primarily due to a forecasted decline in its install base, which is anticipated to negatively impact revenue for fiscal year 2025. Additionally, the company is facing significant foreign exchange headwinds and customer churn associated with its Clearbit acquisition, which contribute to overall revenue guidance reductions. The average subscription revenue per customer has also shown a slight decline year-over-year, indicating potential challenges in customer retention and expansion.