Jim Cramer’s Latest Stock Picks

3. HubSpot, Inc. (NYSE:HUBS)

Number of Hedge Fund Holders: 80

A caller expressed to Cramer that they have been having a hard time figuring out the fair price of HubSpot, Inc. (NYSE:HUBS) stock. Cramer agreed, saying:

“It was really hard. I tell you, it’s really, really hard. I mean, it sells [at] a high multiple. I have preferred Salesforce.com with Agent Force.”

The stock has a forward PE of 69.03, which shows a premium of 185.26% compared to its sector. HubSpot (NYSE:HUBS) is a provider of a cloud-based customer relationship management (CRM) platform designed to support businesses in various aspects of customer engagement. The platform has a range of tools that facilitate marketing automation, sales tracking, customer service management, content management, data unification, and B2B commerce.

A significant aspect of its approach is its redefined concept of inbound marketing. The methodology centers on drawing in potential customers by producing engaging and valuable online content, utilizing channels such as social media and blogs to capture interest and foster relationships. The effectiveness of this strategy is reflected in the company’s growth metrics.

In the second quarter, the company reported revenue of $637 million, marking a 20% increase from the previous year. The adjusted EPS reached $2.03, which is a 40% rise. The growth was due to a 23% increase in customer accounts, bringing the total to 228,045. Management has indicated that the total addressable market (TAM) for the company, valued at $51 billion in 2023, is projected to grow to $77 billion by 2028.

Management has provided guidance for the upcoming quarter, forecasting revenue between $646.0 million and $647.0 million, alongside a non-GAAP operating income of $107.0 million to $108.0 million. Furthermore, HubSpot (NYSE:HUBS) has revised its full-year revenue expectations for 2024, now forecasting between $2.567 billion and $2.573 billion, an increase from the prior estimate of $2.550 billion to $2.560 billion. Non-GAAP net income per share is expected to fall between $7.64 and $7.70, an upward adjustment from the previous forecast of $7.30 to $7.38.