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HubSpot thesis the same but case for multiple expansion 'more challenging' - Raymond James

Published 12/10/2023, 12:14 am
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Analysts at Raymond James downgraded shares of HubSpot (NYSE:HUBS) to Outperform from Strong Buy, lowering the price target to $520 from $600 per share in a note Wednesday.

The analysts told investors they are downgrading shares of the software company after its strong outperformance so far in 2023.

"We believe the significant outperformance YTD sets up a more balanced risk/reward scenario relative to historical levels," the analysts explained.

"Note that HUBS shares have surged 61% YTD and have notably outperformed the IGV at +38%. Our early 3Q checks have also suggested more cautious trends, and while we remind investors that individual HUBS checks aren’t statistically significant, it could create a choppy environment for shares in the short term," they added.

Even so, the firm's still positive rating on the shares reflects its confidence in Hubspot's "management’s consistent R&D and S&M execution." While the firm doesn't think the long-term thesis for shares has changed, they believe the case for material multiple expansion is more challenging.

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