HUBS Lost 10% In A Day. Do You Buy Or Wait?
HubSpot (HUBS) stock is down 10.0% in a day. Already own the stock or planning to buy? You might want to re-consider based on the valuation as the stock still looks expensive. Consider the following data:
- Size: A $25 Bil company with $2.8 Bil in revenue currently trading at $467.80.
- Fundamentals: Last 12 month revenue growth of 19.0% and operating margin of -2.4%.
- Liquidity: Has Debt to Equity ratio of 0.01 and Cash to Assets ratio of 0.45
- Valuation: Currently trading at P/E multiple of -2067.7 and P/EBIT multiple of 2226.8
- Has returned (median) 40.4% within a year following sharp dips since 2010. See HUBS Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for HUBS, see Buy or Sell HUBS Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and HUBS drops another 20-30% to $327 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into HubSpot (HUBS) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: HUBS provides a cloud-based CRM platform featuring marketing, sales, service, and content management systems, along with professional services for customer education and training.
2022 Inflation Shock
- HUBS stock fell 69.9% from a high of $852.08 on 16 November 2021 to $256.09 on 14 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $819.71 on 13 February 2025 , and currently trades at $467.80
| HUBS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -69.9% | -25.4% |
| Time to Full Recovery | Not Fully Recovered days | 464 days |
2020 Covid Pandemic
- HUBS stock fell 47.3% from a high of $198.53 on 19 February 2020 to $104.71 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 29 May 2020
| HUBS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -47.3% | -33.9% |
| Time to Full Recovery | 72 days | 148 days |
2018 Correction
- HUBS stock fell 31.1% from a high of $204.88 on 27 August 2019 to $141.09 on 11 November 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 1 June 2020
| HUBS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -31.1% | -19.8% |
| Time to Full Recovery | 203 days | 120 days |
Worried that HUBS could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.