The Forgotten Growth Stock
HubSpot - remember them - just put in an accelerated growth quarter. That puts it in rare company indeed.
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“Who?”
Hubspot HUBS 0.00%↑ isn't anyone's favorite growth stock. It was born in the Internet 2.0 era and was an early winner in marketing software - specifically it was early to offer 'inbound marketing' functionality which today is commonplace but back in 2010 was new and exciting (a relative term!).
The company has evolved to offer a full suite of CRM and other applications and it is well managed from a financial fundamentals perspective. Growth is solid with good visibility, margins good although not great, balance sheet strong but not a fortress. It is, in short, a perfectly good company to want to own stock in. What's surprising is that it consistently trades at big multiples. Today you can buy ZS for around 12x TTM revenue - it's growing in the 40-50% range with low teens cashflow margins and an order book worth 2x TTM revenue. Or you could buy HUBS for 12x TTM revenue with growth in the 30% zone, lower cashflow margins, and less revenue visibility.
Here's the numbers, valuation and the stock chart, together with our price target and risk management ideas.