Summary
- HubSpot is growing at a considerable rate. I believe that the company is well-positioned for the current economic environment.
- The business is struggling with profitability. It is free cash flow positive, but high stock-based compensation is a major issue.
- Shares are trading at an expensive valuation. I believe that HubSpot’s fundamentals are strong, but the high price makes me cautious right now.
Investment Thesis
HubSpot (NYSE:HUBS) is a solid company growing at a fantastic rate. I believe that it is well-positioned to continue its strong performance even if the economy pulls back.
But the company is struggling with profitability. Shares are trading at a very expensive valuation with high stock-based compensation. I’m optimistic about HubSpot’s prospects, but I’m still cautious right now.
HubSpot Is Well-Positioned For Strong Growth
HubSpot has continued to report strong results, even as the economic environment declines. The company added over 15,000 new customers in the first half of the year alone. These customers fueled another quarter of year-over-year revenue growth of over 35%. The business projects 25% and 22% year-over-year growth for the next two quarters.
