Intrinsic value of HubSpot, Inc. - HUBS

Previous Close

$171.49

  Intrinsic Value

$10.88

stock screener

  Rating & Target

str. sell

-94%

Previous close

$171.49

 
Intrinsic value

$10.88

 
Up/down potential

-94%

 
Rating

str. sell

We calculate the intrinsic value of HUBS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 6.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  35.20
  32.18
  29.46
  27.02
  24.81
  22.83
  21.05
  19.44
  18.00
  16.70
  15.53
  14.48
  13.53
  12.68
  11.91
  11.22
  10.60
  10.04
  9.53
  9.08
  8.67
  8.30
  7.97
  7.68
  7.41
  7.17
  6.95
  6.76
  6.58
  6.42
Revenue, $m
  694
  917
  1,187
  1,508
  1,882
  2,311
  2,798
  3,342
  3,943
  4,602
  5,316
  6,086
  6,909
  7,785
  8,712
  9,690
  10,717
  11,792
  12,916
  14,089
  15,311
  16,582
  17,904
  19,279
  20,707
  22,192
  23,734
  25,338
  27,005
  28,739
Variable operating expenses, $m
  733
  967
  1,251
  1,589
  1,982
  2,434
  2,945
  3,517
  4,150
  4,842
  5,591
  6,400
  7,266
  8,187
  9,162
  10,189
  11,269
  12,400
  13,582
  14,816
  16,100
  17,437
  18,828
  20,273
  21,775
  23,336
  24,958
  26,644
  28,398
  30,221
Fixed operating expenses, $m
  18
  19
  19
  20
  20
  21
  21
  21
  22
  22
  23
  23
  24
  24
  25
  25
  26
  27
  27
  28
  28
  29
  30
  30
  31
  32
  32
  33
  34
  35
Total operating expenses, $m
  751
  986
  1,270
  1,609
  2,002
  2,455
  2,966
  3,538
  4,172
  4,864
  5,614
  6,423
  7,290
  8,211
  9,187
  10,214
  11,295
  12,427
  13,609
  14,844
  16,128
  17,466
  18,858
  20,303
  21,806
  23,368
  24,990
  26,677
  28,432
  30,256
Operating income, $m
  -57
  -69
  -84
  -101
  -120
  -143
  -169
  -197
  -229
  -263
  -297
  -337
  -380
  -426
  -474
  -525
  -579
  -635
  -693
  -754
  -818
  -884
  -953
  -1,025
  -1,099
  -1,176
  -1,256
  -1,340
  -1,426
  -1,517
EBITDA, $m
  -37
  -43
  -51
  -60
  -70
  -82
  -96
  -111
  -127
  -146
  -165
  -186
  -209
  -233
  -258
  -285
  -313
  -342
  -373
  -405
  -438
  -473
  -509
  -546
  -585
  -626
  -668
  -711
  -757
  -804
Interest expense (income), $m
  0
  22
  21
  34
  49
  68
  89
  114
  142
  173
  207
  245
  286
  330
  378
  428
  481
  537
  596
  658
  722
  789
  859
  932
  1,008
  1,087
  1,169
  1,254
  1,342
  1,434
  1,530
Earnings before tax, $m
  -79
  -90
  -118
  -150
  -188
  -232
  -282
  -339
  -401
  -470
  -542
  -623
  -710
  -803
  -902
  -1,006
  -1,116
  -1,231
  -1,351
  -1,476
  -1,607
  -1,743
  -1,885
  -2,032
  -2,186
  -2,345
  -2,510
  -2,682
  -2,861
  -3,046
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -79
  -90
  -118
  -150
  -188
  -232
  -282
  -339
  -401
  -470
  -542
  -623
  -710
  -803
  -902
  -1,006
  -1,116
  -1,231
  -1,351
  -1,476
  -1,607
  -1,743
  -1,885
  -2,032
  -2,186
  -2,345
  -2,510
  -2,682
  -2,861
  -3,046

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  640
  847
  1,096
  1,392
  1,737
  2,134
  2,583
  3,086
  3,641
  4,249
  4,909
  5,620
  6,380
  7,189
  8,045
  8,947
  9,895
  10,888
  11,926
  13,009
  14,137
  15,311
  16,532
  17,801
  19,120
  20,491
  21,915
  23,396
  24,935
  26,537
Adjusted assets (=assets-cash), $m
  640
  847
  1,096
  1,392
  1,737
  2,134
  2,583
  3,086
  3,641
  4,249
  4,909
  5,620
  6,380
  7,189
  8,045
  8,947
  9,895
  10,888
  11,926
  13,009
  14,137
  15,311
  16,532
  17,801
  19,120
  20,491
  21,915
  23,396
  24,935
  26,537
Revenue / Adjusted assets
  1.084
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
  1.083
Average production assets, $m
  86
  114
  147
  187
  233
  287
  347
  414
  489
  571
  659
  755
  857
  965
  1,080
  1,202
  1,329
  1,462
  1,602
  1,747
  1,899
  2,056
  2,220
  2,391
  2,568
  2,752
  2,943
  3,142
  3,349
  3,564
Working capital, $m
  -165
  -218
  -282
  -359
  -448
  -550
  -666
  -795
  -938
  -1,095
  -1,265
  -1,448
  -1,644
  -1,853
  -2,074
  -2,306
  -2,551
  -2,807
  -3,074
  -3,353
  -3,644
  -3,947
  -4,261
  -4,588
  -4,928
  -5,282
  -5,649
  -6,030
  -6,427
  -6,840
Total debt, $m
  306
  491
  716
  982
  1,293
  1,650
  2,054
  2,507
  3,006
  3,554
  4,148
  4,787
  5,471
  6,199
  6,970
  7,782
  8,635
  9,529
  10,463
  11,438
  12,453
  13,510
  14,609
  15,751
  16,938
  18,171
  19,453
  20,786
  22,171
  23,613
Total liabilities, $m
  576
  762
  986
  1,253
  1,564
  1,921
  2,325
  2,777
  3,277
  3,824
  4,418
  5,058
  5,742
  6,470
  7,240
  8,052
  8,906
  9,800
  10,734
  11,708
  12,724
  13,780
  14,879
  16,021
  17,208
  18,442
  19,724
  21,056
  22,442
  23,883
Total equity, $m
  64
  85
  110
  139
  174
  213
  258
  309
  364
  425
  491
  562
  638
  719
  804
  895
  990
  1,089
  1,193
  1,301
  1,414
  1,531
  1,653
  1,780
  1,912
  2,049
  2,192
  2,340
  2,494
  2,654
Total liabilities and equity, $m
  640
  847
  1,096
  1,392
  1,738
  2,134
  2,583
  3,086
  3,641
  4,249
  4,909
  5,620
  6,380
  7,189
  8,044
  8,947
  9,896
  10,889
  11,927
  13,009
  14,138
  15,311
  16,532
  17,801
  19,120
  20,491
  21,916
  23,396
  24,936
  26,537
Debt-to-equity ratio
  4.780
  5.800
  6.530
  7.060
  7.440
  7.730
  7.950
  8.120
  8.260
  8.360
  8.450
  8.520
  8.580
  8.620
  8.660
  8.700
  8.730
  8.750
  8.770
  8.790
  8.810
  8.820
  8.840
  8.850
  8.860
  8.870
  8.880
  8.880
  8.890
  8.900
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -79
  -90
  -118
  -150
  -188
  -232
  -282
  -339
  -401
  -470
  -542
  -623
  -710
  -803
  -902
  -1,006
  -1,116
  -1,231
  -1,351
  -1,476
  -1,607
  -1,743
  -1,885
  -2,032
  -2,186
  -2,345
  -2,510
  -2,682
  -2,861
  -3,046
Depreciation, amort., depletion, $m
  21
  26
  33
  41
  50
  61
  73
  86
  101
  117
  132
  151
  171
  193
  216
  240
  266
  292
  320
  349
  380
  411
  444
  478
  514
  550
  589
  628
  670
  713
Funds from operations, $m
  -59
  -64
  -85
  -109
  -138
  -172
  -210
  -253
  -300
  -353
  -410
  -472
  -539
  -610
  -686
  -766
  -850
  -938
  -1,030
  -1,127
  -1,227
  -1,332
  -1,441
  -1,554
  -1,672
  -1,794
  -1,922
  -2,054
  -2,191
  -2,334
Change in working capital, $m
  -43
  -53
  -64
  -76
  -89
  -102
  -116
  -129
  -143
  -157
  -170
  -183
  -196
  -208
  -221
  -233
  -244
  -256
  -268
  -279
  -291
  -303
  -315
  -327
  -340
  -353
  -367
  -382
  -397
  -413
Cash from operations, $m
  -16
  -11
  -21
  -33
  -49
  -69
  -94
  -123
  -157
  -196
  -240
  -289
  -343
  -402
  -465
  -533
  -605
  -682
  -763
  -848
  -937
  -1,030
  -1,126
  -1,227
  -1,332
  -1,441
  -1,554
  -1,672
  -1,794
  -1,921
Maintenance CAPEX, $m
  -13
  -17
  -23
  -29
  -37
  -47
  -57
  -69
  -83
  -98
  -114
  -132
  -151
  -171
  -193
  -216
  -240
  -266
  -292
  -320
  -349
  -380
  -411
  -444
  -478
  -514
  -550
  -589
  -628
  -670
New CAPEX, $m
  -22
  -28
  -33
  -40
  -46
  -53
  -60
  -67
  -75
  -82
  -89
  -95
  -102
  -109
  -115
  -121
  -127
  -133
  -139
  -145
  -151
  -158
  -164
  -170
  -177
  -184
  -191
  -199
  -207
  -215
Cash from investing activities, $m
  -35
  -45
  -56
  -69
  -83
  -100
  -117
  -136
  -158
  -180
  -203
  -227
  -253
  -280
  -308
  -337
  -367
  -399
  -431
  -465
  -500
  -538
  -575
  -614
  -655
  -698
  -741
  -788
  -835
  -885
Free cash flow, $m
  -51
  -56
  -77
  -102
  -133
  -169
  -212
  -260
  -315
  -376
  -443
  -517
  -596
  -682
  -773
  -870
  -973
  -1,081
  -1,195
  -1,314
  -1,438
  -1,567
  -1,702
  -1,842
  -1,987
  -2,139
  -2,296
  -2,459
  -2,629
  -2,806
Issuance/(repayment) of debt, $m
  -13
  185
  224
  266
  311
  357
  404
  452
  500
  547
  594
  640
  684
  728
  770
  812
  853
  894
  934
  975
  1,015
  1,057
  1,099
  1,142
  1,187
  1,233
  1,282
  1,333
  1,386
  1,441
Issuance/(repurchase) of shares, $m
  259
  111
  143
  180
  223
  272
  327
  389
  457
  531
  608
  694
  787
  884
  988
  1,096
  1,210
  1,330
  1,455
  1,585
  1,720
  1,861
  2,007
  2,159
  2,318
  2,482
  2,653
  2,830
  3,015
  3,207
Cash from financing (excl. dividends), $m  
  246
  296
  367
  446
  534
  629
  731
  841
  957
  1,078
  1,202
  1,334
  1,471
  1,612
  1,758
  1,908
  2,063
  2,224
  2,389
  2,560
  2,735
  2,918
  3,106
  3,301
  3,505
  3,715
  3,935
  4,163
  4,401
  4,648
Total cash flow (excl. dividends), $m
  196
  240
  290
  344
  401
  460
  520
  581
  642
  703
  759
  818
  875
  930
  985
  1,038
  1,091
  1,142
  1,194
  1,246
  1,298
  1,351
  1,404
  1,460
  1,517
  1,577
  1,638
  1,703
  1,771
  1,842
Retained Cash Flow (-), $m
  -259
  -111
  -143
  -180
  -223
  -272
  -327
  -389
  -457
  -531
  -608
  -694
  -787
  -884
  -988
  -1,096
  -1,210
  -1,330
  -1,455
  -1,585
  -1,720
  -1,861
  -2,007
  -2,159
  -2,318
  -2,482
  -2,653
  -2,830
  -3,015
  -3,207
Prev. year cash balance distribution, $m
  360
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  296
  129
  148
  164
  178
  188
  193
  192
  185
  172
  151
  123
  88
  46
  -3
  -58
  -120
  -187
  -261
  -339
  -422
  -510
  -603
  -700
  -800
  -905
  -1,014
  -1,127
  -1,244
  -1,364
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  284
  118
  128
  135
  138
  136
  130
  120
  106
  90
  72
  53
  33
  15
  -1
  -15
  -26
  -35
  -40
  -43
  -44
  -42
  -40
  -36
  -31
  -26
  -22
  -17
  -14
  -10
Current shareholders' claim on cash, %
  50.0
  42.6
  36.5
  31.3
  27.0
  23.4
  20.2
  17.6
  15.3
  13.4
  11.7
  10.3
  9.0
  7.9
  6.9
  6.1
  5.4
  4.7
  4.2
  3.7
  3.3
  2.9
  2.5
  2.3
  2.0
  1.8
  1.6
  1.4
  1.2
  1.1

HubSpot, Inc. (HubSpot) provides a cloud-based marketing and sales software platform. The Company's software platform features integrated applications to help businesses attract visitors to their Websites, convert visitors into leads, close leads into customers and delight customers so that they become promoters of those businesses. These integrated applications include social media, search engine optimization, blogging, Website content management, marketing automation, e-mail, sales productivity, customer relationship management (CRM), analytics and reporting. The Company's products include HubSpot Marketing, HubSpot CRM and HubSpot Sales. The Company offers Professional Services and support. It offers professional services to educate and train customers on how to leverage its software platform and inbound marketing methodology to transform how their business attracts, engages and delights customers.

FINANCIAL RATIOS  of  HubSpot, Inc. (HUBS)

Valuation Ratios
P/E Ratio -133.4
Price to Sales 22.6
Price to Book 51.6
Price to Tangible Book
Price to Cash Flow 322.9
Price to Free Cash Flow -2045.3
Growth Rates
Sales Growth Rate 48.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 69.2%
Cap. Spend. - 3 Yr. Gr. Rate 22.4%
Financial Strength
Quick Ratio 114
Current Ratio 0.1
LT Debt to Equity 0%
Total Debt to Equity 0.8%
Interest Coverage 0
Management Effectiveness
Return On Assets -19.2%
Ret/ On Assets - 3 Yr. Avg. -28.3%
Return On Total Capital -37.9%
Ret/ On T. Cap. - 3 Yr. Avg. -52.6%
Return On Equity -38.2%
Return On Equity - 3 Yr. Avg. -52.8%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 77.1%
Gross Margin - 3 Yr. Avg. 73.5%
EBITDA Margin -12.5%
EBITDA Margin - 3 Yr. Avg. -23.4%
Operating Margin -16.6%
Oper. Margin - 3 Yr. Avg. -27.8%
Pre-Tax Margin -16.6%
Pre-Tax Margin - 3 Yr. Avg. -27.8%
Net Profit Margin -17%
Net Profit Margin - 3 Yr. Avg. -27.9%
Effective Tax Rate -2.2%
Eff/ Tax Rate - 3 Yr. Avg. -0.7%
Payout Ratio 0%

HUBS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HUBS stock intrinsic value calculation we used $513 million for the last fiscal year's total revenue generated by HubSpot, Inc.. The default revenue input number comes from 0001 income statement of HubSpot, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our HUBS stock valuation model: a) initial revenue growth rate of 35.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for HUBS is calculated based on our internal credit rating of HubSpot, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of HubSpot, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of HUBS stock the variable cost ratio is equal to 105.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $18 million in the base year in the intrinsic value calculation for HUBS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.9% for HubSpot, Inc..

Corporate tax rate of 27% is the nominal tax rate for HubSpot, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the HUBS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for HUBS are equal to 12.4%.

Life of production assets of 3.4 years is the average useful life of capital assets used in HubSpot, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for HUBS is equal to -23.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $244.641 million for HubSpot, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 39.602 million for HubSpot, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of HubSpot, Inc. at the current share price and the inputted number of shares is $6.8 billion.

RELATED COMPANIES Price Int.Val. Rating
GOOGL Alphabet Inc. 1,086.30 985.65  hold
ECOM ChannelAdvisor 9.13 0.59  str.sell
IBM International 135.15 162.95  hold

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.