HUBS
HubSpot, Inc.
$260.87
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Undervalued
Trading 50.8% below fair value
You pay
$260.87
Bear
$268.90
Fair
$530.29
Bull
$845.59
Bear
$268.90
+3.1%
14% rev growth, 21% terminal margin
Fair
$530.29
+103.3%
24% rev growth, 28% terminal margin
Bull
$845.59
+224.1%
31% rev growth, 32% terminal margin
Adjust Assumptions
24.0%
28.0%
12.0%
Key Value Driver
Revenue growth (24%) × margin expansion to 28%
Terminal Value % of EV
58%
Implied Market Multiple
3.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (47 analysts)
$242.05
Divergence from AlphaVal
119%
Summary
Projecting 24% revenue growth with FCF margins expanding from 23% to 28% over 10 years, discounted at 12%, the base-case value is $530.29 per share.
Warnings
Gross margin of 84% means each dollar of revenue is highly profitable. As the company grows, overhead costs should shrink as a share of revenue, boosting overall profits.
Wall Street's average price target is $242.05 (from 47 analysts). Our estimate is 119% above the consensus -- consider that gap carefully.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep