HubSpot hit by Wall Street downgrades as demand headwinds intensify

 BTIG, KeyBanc Capital Markets and Cantor Fitzgerald have all downgraded HubSpot after the software company’s weaker-than-expected fourth-quarter outlook pointed to a worsening demand environment.

HubSpot’s third-quarter revenue grew 17% at constant currency, a 2-point beat. However, it guided fourth-quarter growth to 12%, below consensus of 13.8%. Management said budget scrutiny, price sensitivity and longer sales cycles had become more pronounced and are likely to persist into 2027.

The company added 5,300 net new customers in the quarter, below the 5,600 expected, and now expects fewer than 5,000 in the fourth quarter. Net revenue retention, which measures how much existing customers expand their spending, slipped to 101% from 103% a year ago.

BTIG cut HubSpot to Neutral from Buy and lowered its 2027 growth forecast to 11% from 14%. Analyst Nick Altmann said the stock looks appropriately valued at about 10 times 2027 estimated free cash flow.

KeyBanc downgraded the stock to Sector Weight.

“We recognize this is late, but we believe there is little room for improvement between now and when we get formal 2027 guidance next February and are downgrading to Sector Weight,” analyst Jackson Ader wrote.

Cantor downgraded HubSpot to Underweight with a $170 price target. Analyst Matthew VanVliet said the company’s new European pricing effectively amounts to a price cut, and that its AI tools are underperforming peers.

“We no longer see HUBS as a premier SaaS asset that deserves the benefit of the doubt,” he said.

Elsewhere, Morgan Stanley cut HubSpot from Overweight to Equalweight with a new price target of $229, down from $287 per share.