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HubSpot (HUBS) Soars 3.9%: Is Further Upside Left in the Stock?

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HubSpot (HUBS - Free Report) shares ended the last trading session 3.9% higher at $448.22. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 16.7% loss over the past four weeks.

The increase in share price can be attributed to the continued business strength witnessed in HubSpot’s Customer Relationship Management (CRM) business. The company is well positioned to benefit from continued momentum in subscription revenues driven by expanding customer base.

Moreover, positive trend in conversion of freemium users to paid subscribers is anticipated to drive the company’s top line growth. Integration with LinkedIn, Shopify & Facebook is enabling it to expand business avenues.

Further, growing international footprint, portfolio expansion and collaborations bode well. Strategic acquisitions including, The Hustle provider of premium research content, with an aim to scale companies with valuable relevant content across a wide range of topics and a more diverse set of media, augurs well for HubSpot in the longer haul.

Price and Consensus

Price Consensus Chart for HUBS

This cloud-based marketing and sales software platform is expected to post quarterly earnings of $0.29 per share in its upcoming report, which represents a year-over-year change of -17.1%. Revenues are expected to be $263.98 million, up 32.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For HubSpot, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on HUBS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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