We recently published a list of Top 10 Stocks to Buy According to Durable Capital Partners. In this article, we are going to take a look at where HubSpot, Inc. (NYSE:HUBS) stands against other top stocks to buy according to Durable Capital Partners.
Durable Capital Partners is a Maryland-based hedge fund management firm founded in the second quarter of 2019 by Henry Ellenbogen. The firm primarily follows a long-term equity investment strategy, with a focus on early-stage and durable growth in small- and mid-cap equities across public markets. Ellenbogen, who serves as the Managing Partner and Chief Investment Officer, leads the firm’s investment approach.
Ellenbogen established Durable Capital Partners in 2019 and currently holds the roles of Managing Partner and Chief Investment Officer. Before founding Durable, he spent nearly two decades at T. Rowe Price Associates, Inc., where he served as Vice President and Chief Investment Officer for U.S. Equity Growth. During his tenure, he led the U.S. Small-Cap Growth Equity Strategy and managed the New Horizons Fund. Additionally, he was an active member of the U.S. Equity Steering Committee and the Corporate Governance Committee for U.S. Equity.
Between 2001 and 2019, Ellenbogen spearheaded private market investments in several high-profile companies. His leadership at the New Horizons Fund contributed to its recognition with multiple industry awards. Notably, the fund received Investor’s Business Daily’s Best Mutual Funds Award in 2018 across categories such as U.S. Diversified Equity Funds, Growth Funds, and Small-Cap Funds. Additionally, it earned the Thomson Reuters Lipper Fund Award for Best Small-Cap Growth Fund over a ten-year period (2017), a five-year period (2016), and both five- and ten-year periods (2013). Prior to his investment career, Ellenbogen served as Chief of Staff for U.S. Representative Peter Deutsch and gained experience as a Summer Associate at Goldman Sachs.
Academically, he graduated magna cum laude from Harvard College with a degree in History and Science. He later earned a J.D. from Harvard Law School and an MBA from Harvard Business School, where he was recognized as a Baker Scholar. Additionally, he has taught as an adjunct professor at New York University’s Graduate School of Politics. Ellenbogen is a member of the Barron’s Roundtable and contributes to the Investment Committee of the Smithsonian Institution. He also serves as Chairman of the Board for The Posse Foundation.
According to its most recent 13F filing for the fourth quarter of 2024, Durable Capital Partners reported $12.26 billion in managed 13F securities, with its top 10 holdings accounting for 47.59% of its portfolio.
Our Methodology
The stocks discussed below were picked from Durable Capital Partners’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of software developers gathered around a monitor discussing a new CRM platform.
HubSpot, Inc. (NYSE:HUBS)
Number of Hedge Fund Holders as of Q4: 73
Durable Capital Partners’ Equity Stake: $672.61 Million
HubSpot, Inc. (NYSE:HUBS) is an AI-driven customer platform that provides businesses with software, integrations, and resources to enhance marketing, sales, and customer service. Its connected ecosystem helps companies grow by streamlining customer interactions and optimizing business operations.
HubSpot, Inc. (NYSE:HUBS) generates most of its revenue from subscription fees, accounting for 97.7% of total earnings, while a smaller share comes from professional services and other sources. On March 12, Barclays upgraded HubSpot’s stock rating to Overweight from Equal Weight, maintaining a price target of $815, citing factors such as pricing adjustments, an increase in core customers, and improved performance comparisons.
For the fourth quarter of 2024, HubSpot, Inc. (NYSE:HUBS) reported total revenue of $703.2 million, reflecting a 21% year-over-year increase on a reported basis and a 20% increase in constant currency. Subscription revenue reached $687.3 million, growing by 21%, while professional services and other revenue totaled $15.9 million, up 36%. Over the full year 2024, the company recorded a total revenue of $2.63 billion, marking a 21% increase compared to 2023. Subscription revenue grew by 21% to $2.57 billion, while professional services and other revenue climbed 24% to $58 million.
CEO Yamini Rangan highlighted HubSpot’s transformation in 2024, emphasizing the integration of AI across its platform and its impact on customer value. She expressed confidence in the company’s strategy heading into 2025, positioning HubSpot as a leading AI-first customer platform for scaling businesses.
Looking ahead, HubSpot, Inc. (NYSE:HUBS) projects revenue for the first quarter of 2025 between $697 million and $699 million, a 13% year-over-year increase. Non-GAAP operating income is projected between $98 million and $99 million, with an operating profit margin of 14%. The company expects earnings per share to range from $1.74 to $1.76, assuming approximately 54.1 million weighted average diluted shares outstanding.
HubSpot’s strong financial performance, continued revenue growth, and strategic investment in AI reinforce its position as a key player in the customer relationship management industry.
Overall, HUBS ranks 3rd on our list of top stocks to buy according to Durable Capital Partners. While we acknowledge the potential for HUBS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HUBS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
