HubSpot (HUBS) Stock Forecast & Price Target

HubSpot has demonstrated a strong financial performance with improved net revenue retention, which increased by 200 basis points sequentially to 104%, largely attributed to its new seat-based pricing model. The company's gross margins have also shown expansion, reaching 86.7% with subscription gross margins rising to 88.2%, alongside a significant improvement in services margin. Furthermore, HubSpot experienced a notable increase in free cash flow, generating $158.5 million, reflecting a substantial increase from the previous year and indicating robust operational efficiency.

HubSpot's financial outlook reflects significant concerns, particularly with revenue projections indicating a downturn influenced by a shrinking install base, expected to impact FY25 negatively. The company anticipates a sizable foreign exchange headwind and increased churn from legacy customers such as Clearbit, which contribute to a reduction in overall revenue guidance. Additionally, the decline in average subscription revenue per customer demonstrates stagnation, with a minor year-over-year decrease, hinting at potential challenges in customer retention and growth strategy execution.