What Happened:
Shares of sales and marketing software maker HubSpot (NYSE:)
jumped 9.4% in the afternoon session after Reuters reported that Google expressed interest in acquiring the company. According to sources, Alphabet (NASDAQ:) (Google’s parent company) is in talks with investment bankers about a potential offer.
Following the news, Wall Street analysts weighed in on the development, with Stifel analyst expressing reservations regarding the deal. “We believe this would be heavily challenged by regulators given the DOJ already has two suits pending against the company across its Search business and its Ad Tech practices.”
Stifel also touched on the potential merits of the deal, noting, “In our view, Google would be able to leverage its rich data assets that are aggregated across Gmail, its market-leading digital advertising products (Search, YouTube, network, etc.), and its small but growing Cloud business (Hubs might entice more GCP usage)….We also believe this acquisition could help Google’s position in digital advertising with greater ability to leverage first-party data, all in one platform, as Google looks to purge third-party cookies on Chrome later this year.”
Is now the time to buy HubSpot? Find out by reading the original article on StockStory.
What is the market telling us:
HubSpot’s shares are very volatile and over the last year have had 10 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago, when the stock gained 5.5% on the news that the company reported first-quarter results that exceeded analysts’ billings, revenue, gross margin, free cash flow, and earnings per share (EPS) expectations. Customer growth also accelerated. In addition, management provided revenue and EPS guidance for the next quarter and full year above Consensus estimates. Overall, it was a strong quarter for the company on an absolute basis and relative to SaaS peers, some of which stumbled and called out a difficult macro environment.
HubSpot is up 22.4% since the beginning of the year. Investors who bought $1,000 worth of HubSpot’s shares 5 years ago would now be looking at an investment worth $4,080.
