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HubSpot, Inc. (NYSE:HUBS): What Can We Expect From This High Growth Stock?

Simply Wall St

The latest earnings release HubSpot, Inc.’s (NYSE:HUBS) announced in December 2018 confirmed company earnings became less negative compared to the previous year’s level – great news for investors Today I want to provide a brief commentary on how market analysts predict HubSpot’s earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

View our latest analysis for HubSpot

Market analysts’ consensus outlook for next year seems pessimistic, with earnings becoming even more negative, generating -US$72.3m in 2020. In addition, earnings are expected to fall off in the following year, declining to -US$68.0m in 2021 and -US$49.8m in 2022.

NYSE:HUBS Past and Future Earnings, March 5th 2019

Although it’s informative knowing the rate of growth each year relative to today’s value, it may be more valuable to analyze the rate at which the business is growing on average every year. The pro of this approach is that we can get a better picture of the direction of HubSpot’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 19%. This means that, we can expect HubSpot will grow its earnings by 19% every year for the next few years.

Next Steps:

For HubSpot, I’ve put together three key factors you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is HUBS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether HUBS is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HUBS? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.