HubSpot (HUBS) dived in July after news that Google-parent Alphabet (GOOGLE) was no longer considering acquiring the marketing company, but HubSpot shares have gotten over that disappointment.
The stock, which could be called an AI stock, broke out from a buy point of 693.85 in November after a strong quarterly report and soared to an all-time high on Dec. 4.
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HubSpot Stock Recovers From Dive
Magnificent Seven titan Alphabet considered acquiring HubSpot in April. The acquisition would have been the search giant’s largest ever, since HubSpot had a market cap of $35 billion at the time.
Alphabet already had two antitrust investigations underway that were focused on its search and advertising businesses. But acquiring HubSpot would have given Google a strong head start in the competitive customer relationship management software space and made it a direct rival to Salesforce (CRM), while also reducing its dependence on its ad business.
HubSpot broke out on the news April 4, but soon fell below the 50-day moving average before diving below the 200-day moving average on July 10. That’s when news that Alphabet was walking away from its acquisition plan hit the stock. That sell-off did some damage to HubSpot’s chart as the 50-day moving average fell below the 200-day moving average.
That has changed, however, and the 50-day line is back above the 200-day as the stock hovers in a buy zone.
HubSpot provides artificial intelligence tools on its software platform to manage marketing, customer service and sales for businesses. The software behemoth boasts over 230,000 customers globally.
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AI Stock Is A Stock Market Leader
HubSpot has the traits of a stock market leader and ranks first in the specialty enterprise software group, according to IBD Stock Checkup.
Compared with thousands of other stocks, the software AI giant scores the best possible Composite Rating and EPS Rating of 99. The Relative Strength Rating is an impressive 88. Just three months back, that score was 24.
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Shares gapped up after third quarter results were announced on Nov. 6. HubSpot reported sales of $669.7 million and earnings of $2.18 per share. Sales grew 20% while earnings were 35% higher than the prior year.
For the current quarter, the marketing-tech company expects sales of $673 million and earnings per share of $2.19 at the midpoint. Earnings are in line with estimates from analysts polled by FactSet, although sales estimates are slightly higher at $673.7 million.
For the full year, HubSpot put midpoint revenue guidance at $2.598 million with earnings of $7.99 per share.
Mutual funds own 63% of shares outstanding. More funds have bought the stock in six out of the seven most recent quarters. The stock also holds an Accumulation/Distribution Rating of A-. That shows funds have been loading up in recent weeks, as well.
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