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HubSpot Hits 52-Week High on Robust Sales & Customer Growth

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Shares of HubSpot Inc. HUBS rallied to a new 52-week high of $111.85, eventually closing at $110.10 on Feb 21.

Notably, the stock has returned 78.0% in the past year, substantially better than the industry’s rally of 28.7%. The company is benefiting from a robust product portfolio and expanding customer base.

HubSpot has a market capital of $3.27 billion.

Impressive Q4 Earnings, 18’ View Positive

HubSpot reported impressive fourth-quarter 2017 results. The company reported non-GAAP earnings of 12 cents per share against a loss of 13 cents in the year-ago quarter. The figure also beat the Zacks Consensus Estimate of 7 cents per share.

Revenues surged 39% year over year to $106.5 million. The figure surpassed the Zacks Consensus Estimate of $101 million as well as the guided range of $101-$102 million. Year-over-year growth can primarily be attributed to HubSpot’s growing customer base, which increased 48%.

Management provided strong guidance with revenues in the range of $481-$485 million and non-GAAP earnings between 51 cents and 59 cents per share.

Notably, the Zacks Consensus Estimate for fiscal 2018 earnings has surged 37.5% to 55 cents over the last 30 days. The figure reflects year-over-year growth of 120%.

The Zacks Consensus Estimate for fiscal 2018 revenues is currently pegged at $483.5 million, reflecting year-over-year growth of 28.7%.

Improving Adoption: Key Catalyst

Integration of HubSpot’s services with social media giants like Facebook and Shopify is driving adoption. Additionally, rapid adoption of Hubspot One and Hubspot CRM tools is a positive for the company. Moreover, expanding international footprint is a positive.

Further, the acquisitions of Motion AI and Kemvi reflect the company’s focus on integrating artificial intelligence (AI) and expanding solutions portfolio.

The launch of Customer Hub will further boost top-line growth in 2018.

Zacks Rank and Key Picks

However, HubSpot carries a Zacks Rank #4 (Sell), which reflects limited upside in the near term.

NVIDIA Corporation NVDA, CSRA CSRA and Paycom Software PAYC are worth considering since they sport a Zacks Rank #1 (Strong Buy) and trading at 52-week high. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for NVIDIA, CSRA and Paycom are currently pegged at 10.25%, 9.50% and 25.75%, respectively.

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