What’s in Store for HubSpot (HUBS) this Earnings Season?

HubSpot Inc. HUBS is set to report second-quarter 2015 results on Aug 6. Last quarter, the company posted a positive earnings surprise of 17.07%.

Let’s see how things are shaping up for this announcement.

Factors at Play

HubSpot provides inbound marketing software platform that helps companies to attract traffic to their websites, convert visitors into leads and close leads into customers. We are encouraged by the company’s sustained focus on investing in product development and international expansion which should boost the top line in the second quarter.

Furthermore, continuous rise in HubSpot’s revenue per user rate makes us optimistic about its top-line performance in the to-be-reported quarter. However, we remain cautious about the company’s bottom line owing to higher customer acquisition costs.

Earnings Whispers

Our proven model does not conclusively show that HubSpot is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for HubSpot is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss per share of 38 cents.

Zacks Rank: HubSpot currently has a Zacks Rank #3 which when combined with 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are some stocks that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Amtech Systems Inc. ASYS, with an Earnings ESP of +8.00% and a Zacks Rank #3.

2U Inc. TWOU, with an Earnings ESP of +3.57% and a Zacks Rank #3.

Vivint Solar, Inc. VSLR, with an Earnings ESP of +1.52% and a Zacks Rank #3.

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