Why HubSpot Stock Rallied Today
Key Points
HubSpot is rebounding after a tough 2025.
The company reported results that exceeded expectations and provided bullish guidance for 2026.
The stock is attractively priced, but challenges remain.
- 10 stocks we like better than HubSpot ›
Shares of HubSpot (NYSE: HUBS) charged sharply higher on Thursday, surging as much as 17.1%. As of 12:35 p.m. ET, the stock was still up 7.9%.
The catalyst that sent the cloud-based customer relationship management (CRM) specialist higher was its quarterly earnings report, which was far better than expected, driven by growing adoption of its agentic artificial intelligence (AI) tools.
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A turning point?
In the fourth quarter, HubSpot generated revenue of $846.7 million, rising 20% year over year. This resulted in adjusted earnings per share (EPS) of $3.10, which jumped 28%.
To put those numbers in context, analysts' consensus estimates were calling for revenue of $830 million and an adjusted EPS of $2.99, so the company surpassed expectations with room to spare.
HubSpot's customer metrics were encouraging. The company's customer count climbed to 288,706, up 16% year over year. Not only is HubSpot adding new customers, but existing customers are spending more, as its average revenue per subscriber edged up 3%. Furthermore, billings grew 27%.
CEO Yamini Rangan said, "2025 was a transformative year for HubSpot, defined by the momentum of our agentic customer platform and clear acceleration upmarket." He went on to note that "AI adoption gathered pace," and its Breeze Customer Agent and Breeze Prospecting Agent were a hit with customers.
Additionally, the company's positive outlook helped fuel the stock's rise. HubSpot is guiding for first-quarter revenue of $862.5 million at the midpoint of its guidance, which would represent year-over-year growth of roughly 21%. It's also forecasting adjusted EPS of $2.47, which would mark an increase of 40%. Management is expecting its profit margin to expand to 20% in 2026, up from 18.6% last year.
A combination of slowing growth and fears of AI disruption has punished HubSpot over the past year, with the stock down 71%. On the bright side, for investors bullish on the company's prospects, the stock is currently on sale, trading at 19 times forward earnings.
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Danny Vena, CPA has positions in HubSpot. The Motley Fool has positions in and recommends HubSpot. The Motley Fool has a disclosure policy.
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