Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at HubSpot Inc’s (NYSE:HUBS) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for HUBS
How Well Did HUBS Perform?
I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to examine various companies on a more comparable basis, using the latest information. HubSpot’s latest earnings -$42M, which, relative to the prior year’s level, has become more negative. Since these figures may be somewhat myopic, I have created an annualized five-year value for HUBS’s earnings, which stands at -$41M. This doesn’t look much better, since earnings seem to have gradually been getting more and more negative over time.
We can further assess HubSpot’s loss by looking at what’s going on in the industry on top of within the company. Firstly, I want to briefly look into the line items. Revenue growth over past couple of years has rose by 33.94%, signalling that HubSpot is in a high-growth phase with expenses racing ahead high top-line growth rates. Looking at growth from a sector-level, the US software industry has been growing its average earnings by double-digit 18.12% over the previous year, and a more subdued 7.70% over the past couple of years. This shows that whatever uplift the industry is benefiting from, HubSpot has not been able to gain as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most valuable step is to examine company-specific issues HubSpot may be facing and whether management guidance has dependably been met in the past. You should continue to research HubSpot to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for HUBS’s future growth? Take a look at our free research report of analyst consensus for HUBS’s outlook.
2. Financial Health: Is HUBS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.