Moreover, HubSpot has raised capital in the past few years “with no obvious use for it.” The company conducted a $343 million secondary equity offering in 2019 and issued convertible bonds worth $460 million in 2020.
Furthermore, several online reviews detail the difficulty of HubSpot’s learning curve and expensive prices. Kerrisdale believes this multiple will be unsustainable for HubSpot as pandemic beneficiary companies start to return to normal and investors begin questioning unprofitable companies.Īccording to Kerrisdale’s research and interviews with online marketing professionals, HubSpot’s products are “‘good enough’ for many purposes but don’t possess any sort of commanding lead in capabilities or ease of use.” The hedge fund cites several online reviews that mention that the company’s variety of products doesn’t offer any real utility. Meanwhile, HubSpot trades at a 20x EV/NTM sales multiple. Indeed, industry peers SquareSpace (NYSE: SQSP) and Wix (NASDAQ: WIX) trade at an enterprise value to next 12 months revenue (EV/NTM revenue) multiple of 5.1x and 5.7x, respectively. However, the hedge fund argues that the price of HubSpot is now trading at a premium relative to industry peers for no solid reason. Kerrisdale gives credit to HubSpot for growing revenues after the pandemic due to mid-sized businesses rushing to go digital. Prior to the 2020 pandemic, HubSpot’s revenue growth was in decline for several years. In the past few years, the company has lost its CEO, chief operating officer, chief sales officer and chief strategy officer.
Kerrisdale highlights that HubSpot has a recent history of major executives leaving. InvestorPlace - Stock Market News, Stock Advice & Trading Tips What to Know About the Kerrisdale Short Report Rocking HUBS Stock
Let’s dive into the details on the HubSpot short report.
However, when Kerrisdale talks, people listen. Shares of HUBS stock have remained relatively resilient in the wake of Kerrisdale’s short report, down less than 2%.
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