Research from Kerrisdale Capital, Kerrisdale Capital Management

Kerrisdale Capital Management

Research from Kerrisdale Capital

Equity Bottom-Up

HubSpot, Inc. provides a cloud-based marketing and sales software platform. The Company offers integrated applications that helps in lead generation and social marketing.

<ul>
<li>We are short shares of <a href="https://www.smartkarma.com/entities/hubspot-inc" target="_blank" data-smartkarma-citation="entities:7119" rel="noopener">Hubspot Inc (HUBS US)</a>, an unprofitable SaaS company that, despite the recent downward re-rating of the tech sector, still trades at 20x forward revenue. HubSpot is not worth anything close to its current valuation.</li>
<li>The company is a COVID beneficiary whose future growth will likely pale in comparison to its pandemic-fueled pull-forward in sales. Its expensive products face an increasing plethora of dramatically lower-priced and often superior alternatives, backed by billions of dollars of free-flowing venture capital. Top executives are selling shares and departing.</li>
<li>Naturally, HubSpot doesn’t turn a profit. Should it ever try to, its margins will likely disappoint.</li>
</ul>
<hr>
<p><strong>Table of Contents</strong></p>
<ul>
<li>COMPANY BACKGROUND</li>
<li>HUBSPOT IS PERSISTENTLY UNPROFITABLE</li>
<li>HUBSPOT’S PRODUCTS ARE NOTHING SPECIAL</li>
<li>CAPITAL HAS BEGUN TO FLOW RAPIDLY INTO HUBSPOT’S COMPETITORS </li>
<li>HUBSPOT LEADERSHIP IS IN FLUX AND HAS STEADILY SOLD STOCK</li>
<li>CONCLUSION </li>
</ul>


We are short shares of Hubspot Inc (HUBS US), an unprofitable SaaS company that, despite the recent downward re-rating of the tech sector, still trades at 20x forward revenue. HubSpot is not worth anything close to its current valuation.
The company is a COVID beneficiary whose future growth will likely pale in comparison to its pandemic-fueled pull-forward in sales. Its expensive products face an increasing plethora of dramatically lower-priced and often superior alternatives, backed by billions of dollars of free-flowing venture capital. Top executives are selling shares and departing.
Naturally, HubSpot doesn’t turn a profit. Should it ever try to, its margins will likely disappoint.


Table of Contents

COMPANY BACKGROUND
HUBSPOT IS PERSISTENTLY UNPROFITABLE
HUBSPOT’S PRODUCTS ARE NOTHING SPECIAL
CAPITAL HAS BEGUN TO FLOW RAPIDLY INTO HUBSPOT’S COMPETITORS 
HUBSPOT LEADERSHIP IS IN FLUX AND HAS STEADILY SOLD STOCK
CONCLUSION 


HubSpot, Inc. (HUBS) - Not Worth All the Hubbub

HubSpot, Inc. (HUBS) - Not Worth All the Hubbub

We are short shares of HubSpot, Inc. (HUBS), an unprofitable SaaS company that, despite the recent downward re-rating of the tech sector, still...

Kerrisdale Capital Management