Customer relationship management platform operator HubSpot is Wednesday's pick for IBD 50 Growth Stocks To Watch. The software stock also is in a buy zone out of a flat base as HubSpot's earnings report looms.
HubSpot's artificial intelligence-powered customer management platform offers software for marketing, sales, customer service and operations departments.
It strives to help customers generate leads, close deals, retain customers and manage content. Also, HubSpot serves customers in more than 135 countries.
The IBD 50 and IBD Leaderboard name holds the No. 1 spot out of 37 stocks in the Computer Software-Specialty Enterprise group. Further, that ranks No. 13 out of the 197 groups that Investor's Business Daily tracks.
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HubSpot Stock Sits In Buy Zone
The stock is climbing around 1.5% Monday morning in lighter-than-average volume.
HubSpot stock broke out of the base on Jan. 27, in heavy volume. That came after Barclay's raised its price target on the stock to 725 from 650 and also maintained its equal-weight rating on the software stock.
HubSpot stock is in the 5% buy zone up to 800.59 of an early-stage flat base with a 762.47 buy point, according to MarketSurge pattern recognition. The stock has hovered in the buy zone since it broke out. Shares reached the 800 price level twice, but have yet to close above the round number.
The stock rode up its 10-week moving average from September until mid-January without undercutting it. Shares are back above the line.
Profit Growth Looks To Taper
On Nov. 6, HubSpot handily beat third-quarter adjusted earnings and sales forecasts. It also gave a fourth-quarter profit outlook mostly in line with views and revenue estimate above projections.
In its earnings report, management said it expects revenue to be in the $672 million to $674 million range. It also forecasts full-year 2024 revenue of $2.597 billion to $2.599 billion.
Fourth-quarter profit estimates call for 25% growth on a 16% sales boost. Further, its earnings growth has decelerated and it is expected to slide to 9% over the next four quarters.
Full-year 2024 forecasts show a 28% rise in earnings and 14% in 2025. Meanwhile, an average 15% revenue growth is projected over the same time period.
Earnings Due Feb. 12
The customer relationship management company is expected to report fourth-quarter earnings results Feb. 12, after the market close.
Its IBD Accumulation/Distribution Rating of B+ indicates fairly heavy institutional buying over the last 13 weeks.
Mutual funds own 66% of shares, with 1,909 funds owning HubSpot stock in December, up from 1,866 in September. A handful of IBD Mutual Fund Index names also own the software stock, including T. Rowe Price New Horizon Fund.
The software stock holds best-possible Composite and Earnings Per Share Ratings of 99.
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