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RBC - HubSpot's buying potential surges as Google shelves acquisition plan

Investing.com
·1-min read

Investing.com - Analysts from RBC have weighed in on the recent news that Alphabet Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) has reportedly suspended its efforts to acquire HubSpot Inc (NYSE:HUBS)., leading to a 12.1% drop in its share price.

RBC analysts expressed little surprise at the stalled negotiations, stating that they did not anticipate a formal offer to materialise. They cited potential antitrust scrutiny as a significant deterrent for Google to pursue an acquisition.

Analysts believe that HubSpot has a brighter future as an independent company. They highlighted the company's successful move upmarket, its multi-product adoption, and the accelerating momentum of its Service Hub.

They also projected that HubSpot could achieve margins exceeding 30% in the medium term and stand to benefit significantly from the GenAI trend in the near and medium term. As such, they believe that HubSpot remaining independent is the best possible outcome.

In light of the recent drop in HubSpot's shares, now trading below 10x EV/CY24E (Enterprise Value to Calendar Year 2024 Estimated) revenue, RBC analysts recommend seizing this opportunity and buying shares for duration on the weakness.

RBC maintained an outperform rating for HubSpot, with a price target of $700.

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