HubSpot at 2019 Levels Is an Opportunity—Not a Warning

Key Points

• HubSpot shares have fallen more than 75% from last year's high and are back at 2019 levels, despite the company delivering record revenue and making tangible progress with its AI pivot.
• Last week's earnings report may have marked a bottom, as shares have been bouncing back from their post-earnings low and insider buying has started for the first time in years.
• Several analysts rate HubSpot a Buy, with recent price targets suggesting as much as 80% upside from current levels.

Shares of HubSpot Inc NYSE: HUBS are trading right around $200, having recovered from the $174 low they set following the May 7 earnings report. The software stock is still down more than 75% from last year's high and has shed roughly half its value since January alone. This kind of price action means HubSpot has become known as one of the more brutal casualties of the broader SaaS selloff over the past year.

For additional context on just how bad the chart looks, HubSpot is back trading at the same levels it was at in 2019, despite the company continuing to deliver record revenue prints every quarter. That's the core tension facing HubSpot and would-be investors today. The stock price and chart tell a story of a business in serious trouble, but the fundamentals tell a very different one.

Last week's earnings report saw HubSpot once again beat expectations, delivering 23% year-on-year revenue growth, raising its full-year guidance, and hitting its 2027 operating margin target a full year ahead of schedule.

In that light, is there an argument to be made that the market has got this one horribly wrong, and we're actually looking at a serious buying opportunity?

Poor Initial Reaction to Earnings

There's no getting away from the fact that the initial reaction to the May 7 earnings results was ugly, with shares selling off about 30% from their pre-earnings levels and setting a fresh multi-year low. Despite the headline beat, investors were understandably spooked when management admitted that the quarter had gotten off to a slow start, but the broader context matters.

HubSpot is mid-way through a transition to an outcome-based pricing model for its AI agents, which naturally extends sales cycles as sales teams are retrained and customers evaluate the new tools. If there was a short-term disruption at the start of the quarter, then it was intentional and strategic, not a sign of demand falling apart.

But Its AI Pivot Is Starting to Gain Traction

One of the more important things to consider about the HubSpot opportunity right now is how its AI monetization efforts are already showing up in the data, rather than just as management talking points. According to last week's report, total AI credits consumed by HubSpot's customers jumped nearly 70% on the previous quarter, suggesting meaningful adoption and buy-in from its customer base.

There's also HubSpot's ongoing shift to outcome-based pricing to consider, and this is shaping up to be one of its more strategically interesting moves. Outcome-based pricing is something many, if not most, SaaS companies are striving towards right now, as the old seat-based pricing model was made redundant overnight by the coming of AI-enabled vibe coding.

While the near-term friction of making this pivot is real, ultimately tying its costs to quantified outcomes supports two big things: first, it aligns HubSpot's revenue directly with customer value, which will bode well for its customer retention and expansion aspirations. And secondly, it sets HubSpot up for success as a SaaS business in an AI world. Those of its peers who fail to make this pivot will find it increasingly hard in the coming months to remain competitive.

Another Signal the Market May Be Missing

Beyond the fundamentals, there are other data points worth highlighting that lend themselves to the bulls' thesis. According to MarketBeat's Insider Trades tool, this quarter marks the first time in a long time that HubSpot insiders bought the stock rather than just selling it, with the CTO and CEO picking up more than $2.5 million in combined purchases.

It's not unreasonable to wonder if the people who know the business best have chosen this moment, at multi-year lows, to put their own capital to work. That's a signal that is hard to ignore.

Bullish Analysts and an Attractive Valuation

Many from the analyst community have been arriving at a similar conclusion. Canaccord Genuity, Sanford Bernstein, and Goldman Sachs have all reiterated Buy or equivalent ratings in recent weeks, with fresh price targets ranging up to $382, implying potential upside of more than 80% from current levels. Others, like BNP Paribas, have taken a more cautious Neutral stance, but the weight of conviction from the bullish price targets alone makes for an attractive risk/reward profile.

The stock's valuation matters too. HubSpot's latest PE ratio might sound high at around 110, but considering it started the year above 400, there's an argument that it's actually quite low right now. When you add in the fact that this is a business printing record quarterly revenues, while its AI pivot gains traction, and insiders start buying the stock again, it becomes much easier to argue that the stock's collapse has created a comeback opportunity that might be too good to miss.