Canaccord reiterates Buy on HubSpot stock, keeps $300 target

Canaccord Genuity has maintained its “Buy” rating on HubSpot Inc (NYSE:HUBS) stock while keeping its price target at $300. The firm believes the stock is undervalued, with a Fair Value of $307, suggesting potential upside from its current price of $230. Despite questions surrounding the timing of renewed growth, Canaccord notes that this is already factored into the current valuation.

The investment firm points out that HubSpot's current valuation is lower than what a well-established franchise with a strong distribution network, expanding AI opportunities, and additional years of operating leverage would warrant. HubSpot's impressive 83% gross profit margin and 21% revenue growth contribute to this positive outlook.

Among other ProTips, analysts highlight that net income is projected to increase this year, supporting the earnings expansion narrative. Canaccord's Analyst Day reinforced the firm's confidence in HubSpot's ability to stay strategically relevant and generate incremental revenue from AI. While the absence of an updated growth framework has not narrowed the range of outcomes regarding when or how the AI opportunity will impact growth rates, the higher margin target provides a path for compounding earnings as the AI commercial model matures.

HubSpot's current valuation offers ample room for top-line timing to deviate from expectations. For further details on HubSpot's growth trajectory and AI monetization potential, investors can access the comprehensive Pro Research Report, available for HubSpot and over 1,400 other US equities through InvestingPro.