Shares of HubSpot Inc. HUBS hit a new 52-week high of $59.03 on Dec 4. The stock closed at $59.02, representing a year-to-date return of 76.3%. The average trading volume for the last three months aggregated over 313K.
An impressive track record of exceeding the quarterly bottom-line expectations in addition to the encouraging fourth-quarter and full-year 2015 outlook and regular innovative product launches drove HubSpot’s shares higher.
With respect to the earnings surprise, the stock has surpassed the Zacks Consensus Estimate in all the preceding four quarters with an average surprise of 10.38%.
HubSpot reported better-than-expected third-quarter 2015 results on Nov 4. Though the company incurred a net loss per share of 40 cents, it fared better than the Zacks Consensus Estimate of a loss of 45 cents as well as the year-ago quarter’s loss of $1.84.
Revenues not only increased 56.7% year over year to $47.7 million but also surpassed the Zacks Consensus Estimate of $44 million. The improvement was primarily backed by strong customer growth and increased average subscription revenue per customer.
During the quarter, the company’s total customer base grew more than 35% on a year-over-year basis to 16,854. Moreover, average subscription revenue per customer increased to $10,607 from $9,183 a year ago.
Moving ahead, buoyed by better-than-expected results, HubSpot raised the outlook for 2015. The company now expects revenues in the range of $178.5 million to $179.5 million, up from the $171.7 million to $173.7 million range.
HubSpot lowered its loss per share forecast for the year to a range of 78 cents to 80 cents, from 88 cents to 92 cents.
For the fourth quarter, HubSpot expects revenues between $49.7 million and $50.7 million. Moreover, non-GAAP loss per share is likely to be in the range of 17 cents to 19 cents.
HubSpot offers 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 we believe will continue to boost the top-line performance over the long run.
Furthermore, continuous rise in HubSpot’s revenue per user rate adds to our optimism.
However, we remain cautious about the bottom line owing to higher customer acquisition costs.
HubSpot currently carries a Zacks Rank #2 (Buy). Some stocks worth considering in the broader technology sector are Cvent Inc. CVT, Determine Inc. DTRM and Paylocity Holding Corporation PCTY. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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