HubSpot Inc (HUBS, Financial), a leading software company, has experienced a remarkable stock performance in recent months. With a current market capitalization of $31.31 billion, the company's stock price stands at $622.19, reflecting a 3.34% gain over the past week. This uptick is part of a larger trend, as HubSpot's shares have soared by 46.53% over the past three months. According to the GF Value, which is currently at $617.18, HubSpot is considered Fairly Valued. This is a shift from three months ago when the stock was deemed Modestly Undervalued with a past GF Value of $679.94. This recent surge in stock price is a testament to the company's robust performance and investor confidence.
Understanding HubSpot's Business Model
HubSpot Inc, established in the software industry, offers a comprehensive cloud-based platform that integrates marketing, sales, and customer service functionalities. The company's growth platform is designed to assist businesses in scaling and achieving better growth. Founded in 2006 and going public in 2014, HubSpot has its headquarters in Cambridge, Massachusetts. The company's mission to help businesses grow better has evolved from a focus on inbound marketing to a broader embrace of marketing, sales, and service. 
Assessing HubSpot's Profitability
HubSpot's Profitability Rank stands at 4 out of 10, which suggests that there is room for improvement when compared to other companies in the industry. The company's Operating Margin is currently at -5.05%, which is better than 36.21% of its industry peers. In terms of return on equity, HubSpot's ROE is at -17.10%, surpassing 26.83% of competitors. The ROA of -6.84% and ROIC of -7.91% also indicate that HubSpot is performing better than 33.65% and 33.5% of companies in the software industry, respectively. These figures highlight HubSpot's potential for profitability despite its current negative margins. 
HubSpot's Growth Trajectory
HubSpot's Growth Rank is impressive at 8 out of 10, indicating strong growth prospects. The company's 3-Year Revenue Growth Rate per Share stands at 30.90%, outperforming 84.6% of its industry peers. Over a 5-year period, the Revenue Growth Rate per Share is 28.30%, surpassing 89.41% of competitors. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at 21.10%, which is better than 84.32% of industry peers. Despite a negative 3-Year EPS without NRI Growth Rate of -22.40% and a 5-Year EPS without NRI Growth Rate of -13.00%, HubSpot's future EPS Growth Rate (Future 3Y To 5Y Est) is expected to be a robust 32.47%, outpacing 87.1% of competitors. These growth metrics underscore HubSpot's strong revenue expansion and potential for future earnings improvement. 
Key Shareholders in HubSpot
HubSpot's shareholder base includes notable investors such as Chase Coleman (Trades, Portfolio), who holds 260,200 shares, representing a 0.52% share percentage. The Harbor Capital Appreciation Fund (Trades, Portfolio) is another significant holder with 242,486 shares, accounting for 0.48% of the company's shares. Additionally, Jim Simons (Trades, Portfolio) has a stake in HubSpot with 182,174 shares, equating to 0.36% share percentage. These investors' commitments to HubSpot reflect their confidence in the company's growth and profitability potential.
Competitive Landscape
When compared to its competitors, HubSpot stands strong with a market cap of $31.31 billion. Its closest competitors include Fair Isaac Corp (FICO, Financial) with a market cap of $30.09 billion, Zoom Video Communications Inc (ZM, Financial) at $20.79 billion, and Ansys Inc (ANSS, Financial) with $28.93 billion. HubSpot's recent stock performance and growth prospects position it competitively within the software industry, suggesting a robust market presence among its peers.
Conclusion
In summary, HubSpot Inc's recent stock price rally is a reflection of its solid growth prospects and market confidence. The company's fair valuation, according to the GF Value, coupled with its strong growth rank and strategic shareholder base, positions it well for future success. Despite some challenges in profitability, HubSpot's growth trajectory and competitive standing in the software industry make it a noteworthy stock for investors to consider. As the company continues to innovate and expand its platform, it remains a compelling story in the tech sector.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
