Analysts Cite Muted Optimism For HubSpot (HUBS)

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HubSpot, Inc. (NYSE:HUBS) is a software company that provides customer relationship management products and services. The firm’s Smart CRM platform enables customers to consolidate their data, teams, and tech stacks under a single platform.

On November 6th, Evercore ISI maintained an In Line rating for HubSpot, Inc. (NYSE:HUBS)’s shares and reduced the price target to $500 from $650. The hefty target cut came after the firm’s third-quarter earnings report, which disappointed Evercore when it came to the fourth quarter guidance. However, Evercore noted that HubSpot, Inc. (NYSE:HUBS)’s net new annual recurring revenue was growing faster than its revenue, and the firm was also expected to improve its net revenue retention in the current quarter. However, the research firm cautioned that the timeline for HubSpot, Inc. (NYSE:HUBS)’s revenue reacceleration was cloudy.

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HubSpot, Inc. (NYSE:HUBS)’s fourth quarter revenue guidance was in-line with estimates, while its $809.5 million revenue beat analyst estimates. The results were driven by several factors, including a 21% subscription revenue growth and 10,900 new customer additions.

During the third-quarter earnings call, RBC’s Rishi Jaluria asked HubSpot, Inc. (NYSE:HUBS)’s management how they were gauging success with their AI products. In response, CEO Yamini Rangan commented:

“Rishi, that’s a great question. And I think I’ll kind of start with our strategy, the momentum and then how we are driving customer adoption because that is the right question to be digging into. If you step back, our strategy for AI has been consistent and clear, which is we want to embed AI into all of our hubs and platforms. We want to build agents that deliver work for our customers, and we want to deliver breeze, assistant and connectors that convert data into insights. And the strategy has just been consistent across the board. So when we look at momentum as well as traction in terms of the strategy, we look at all factors there. So the first thing is, is the embedded strategy working? And the answer for us is very clear because embedded features are being used across Marketing Hub, Sales Hub, Service Hub.

They are improving the outcomes for our customers, things like conversion rate that I mentioned before, win rate, an improvement in 10% win rate in sales. I mean, previously before AI, I don’t think that types of outcome would have been possible with Sales Hub. I think that’s a huge improvement for our customers.”

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Disclosure: None. This article is originally published at Insider Monkey.