HubSpot (HUBS) Stock Forecast & Price Target

HubSpot is projecting a positive financial outlook for 2025, expecting net revenue retention (NRR) to improve modestly and forecasted net customer additions to reach the higher end of the 9,000-10,000 range for the third and fourth quarters. The company has updated its revenue guidance to between $3.113 and $3.115 billion, representing a 19% year-over-year increase at the midpoint, with a significant contribution from international revenue growing 20% year-over-year in constant currency. Furthermore, subscription revenue has demonstrated robust performance, increasing by 21% year-over-year to $791.7 million, bolstered by advancements in customer engagement tools that have notably enhanced lead conversion and sales win rates.

The analysis indicates concerns regarding HubSpot's financial performance, specifically highlighting a decline in free cash flow, which decreased to $142.5 million, or a margin of 17.6%, from the prior year's $124.8 million and an 18.6% margin. Additionally, the company's net revenue retention rate remained stagnant at 103% quarter-over-quarter, signaling potential difficulties in maintaining growth momentum. The reported gross margins have also contracted by 150 basis points year-over-year to 85.1%, driven by a notable decline in subscription gross margins, raising further apprehensions about future profitability.