• If you are wondering whether HubSpot at around US$214.69 is starting to look attractively priced or still demanding, the recent share performance gives you a lot to think about.
• The stock has seen a 3.7% decline over the last 7 days, a 9.8% decline over the last 30 days, and is down 43.8% year to date and 64.2% over the past year, which may signal changing views on its risk and return profile.
• These moves have unfolded as investors reassess high growth software names and focus more closely on the balance between growth expectations and current valuations. For HubSpot, that broader shift in sentiment forms an important backdrop when thinking about what the current share price really reflects.
• Simply Wall St currently gives HubSpot a 4/6 valuation score, and the rest of this article will break that down using several valuation approaches before finishing with a more complete way to think about what the stock might be worth.

Approach 1: HubSpot Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes estimates of the cash HubSpot could generate in the future and discounts those cash flows back to today to arrive at an estimated intrinsic value per share.

For HubSpot, the model uses last twelve months free cash flow of about $597.6 million and projects this forward using analyst estimates for the next few years, then extrapolates beyond that. By 2030, free cash flow is projected at $2.2b, with interim yearly projections between 2026 and 2035 discounted back to present using Simply Wall St’s 2 Stage Free Cash Flow to Equity framework.

On this basis, the DCF model arrives at an estimated intrinsic value of about $852.30 per share. Compared with the recent share price of about $214.69, this implies the stock is 74.8% undervalued according to this particular model and its assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests HubSpot is undervalued by 74.8%. Track this in your watchlist or portfolio, or discover 54 more high quality undervalued stocks.

Approach 2: HubSpot Price vs Sales

For companies where profitability may not fully reflect the underlying business yet, the P/S ratio is often a useful way to think about value. It relates what you pay for each dollar of sales, which can be especially helpful for software firms that reinvest heavily and may not show steady earnings.

In general, higher growth expectations and lower perceived risk can justify a higher “normal” or “fair” P/S multiple. Slower growth or higher risk tends to pull that multiple down. So the question is what feels reasonable for HubSpot today.

HubSpot currently trades on a P/S ratio of 3.62x. That sits close to the broader Software industry average of 3.57x and below the peer group average of 7.13x. Simply Wall St’s Fair Ratio for HubSpot is 7.23x, which is a proprietary estimate of what the P/S multiple could be given factors like its growth profile, margins, industry, market cap and specific risks.

The Fair Ratio can be more informative than a simple comparison with peers or the sector because it adjusts for those company specific characteristics rather than assuming one size fits all. Comparing the Fair Ratio of 7.23x with the actual 3.62x indicates that HubSpot’s shares are currently trading below that modeled fair level.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your HubSpot Narrative

Earlier it was mentioned that there is an even better way to understand valuation, and on Simply Wall St that comes through Narratives. These let you link a clear story about HubSpot to concrete forecasts for revenue, earnings and margins, and then to a Fair Value that you can compare with today’s price to decide whether the current market level fits your view. All of this is available within an easy tool on the Community page, where Narratives update automatically as fresh news or earnings arrive. For example, one HubSpot Narrative might assume a Fair Value near US$329.51 based on medium term revenue growth of about 13.6% and a modest profit margin, while another Narrative might lean toward a Fair Value around US$735.17 built on higher assumed revenue growth of about 18.0% and a 12.3% margin. This gives you a clear, side by side sense of how different stories about HubSpot can justify very different estimates of what the shares may be worth.

Do you think there's more to the story for HubSpot? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.