HUBS
HubSpot, Inc.
$222.28
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Undervalued
Trading 54.5% below fair value
You pay
$222.28
Bear
$256.30
Fair
$488.03
Bull
$759.43
Bear
$256.30
+15.3%
13% rev growth, 21% terminal margin
Fair
$488.03
+119.6%
22% rev growth, 28% terminal margin
Bull
$759.43
+241.7%
29% rev growth, 32% terminal margin
Adjust Assumptions
22.0%
28.0%
12.0%
Key Value Driver
Revenue growth (22%) × margin expansion to 28%
Terminal Value % of EV
57%
Implied Market Multiple
3.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (47 analysts)
$244.09
Divergence from AlphaVal
100%
Summary
Projecting 22% revenue growth with FCF margins expanding from 23% to 28% over 10 years, discounted at 12%, the base-case value is $488.03 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 $244.09 (from 47 analysts). Our estimate is 100% 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