HubSpot (HUBS) Stock Drops 24% After Q1 Earnings Trigger Wall Street Downgrades

TLDR

• HubSpot stock fell more than 24% in Friday premarket trading after Q1 earnings
• Revenue of $881M beat estimates, but full-year guidance disappointed Wall Street
• William Blair and Cantor Fitzgerald both downgraded the stock
• Elongating sales cycles and a sales force retraining disruption weighed on outlook
• Morgan Stanley cut its price target from $405 to $350, maintaining Overweight

HubSpot (HUBS) dropped more than 24% in Friday premarket trading, opening at $243.74, after the company’s Q1 results raised questions about its ability to hit the growth targets investors were counting on.

HubSpot, Inc., HUBS

The headline numbers were actually solid. Revenue came in at $881 million, up 23% year-over-year and ahead of the $863 million consensus. EPS of $2.72 beat estimates of $2.47 by $0.25. Operating margin hit 17.8%, 100 basis points above expectations.

So what’s the problem? Guidance.

HubSpot’s full-year revenue guidance failed to fully reflect the Q1 beat. Cantor Fitzgerald noted the company only flowed through about two-thirds of the first-quarter outperformance into its FY26 outlook. That leaves the high-teens to roughly 20% constant-currency growth many investors were expecting looking out of reach.

Cantor cut its rating to Neutral from Overweight and slashed its price target from $325 to $200. William Blair moved to Market Perform from Outperform.

Sales Disruption Added to the Concern

Part of the issue was a stumble at the start of Q2. HubSpot spent about a week in April retraining its sales team following updates tied to its Spring Spotlight product launch. That disruption dented early second-quarter momentum.

Management also flagged elongating sales cycles. Cantor analysts described most of the causes as “self-inflicted choices” made with longer-term benefits in mind, but ones that are likely to weigh on growth for the next few quarters.

Morgan Stanley kept its Overweight rating but cut its price target from $405 to $350. Wells Fargo, Needham, Stifel, and Citigroup also trimmed their targets. Needham’s cut was the sharpest, dropping from $700 to $300 while keeping a Buy rating.

Where Analysts Stand Now

Across the board, the consensus remains cautiously positive. Of the 29 analysts tracked by MarketBeat, 23 have a Buy rating, four a Hold, and two a Sell. The average target price sits at $365.96 — well above where the stock is trading.

HubSpot’s one-year high was $682.57. It hit a low of $187.45 over that same period.

For Q2 2026, the company guided EPS of $3.00 to $3.02. Full-year EPS guidance stands at $13.04 to $13.12.

Insider activity has been worth watching. Director Brian Halligan sold 8,500 shares in March at $262.75. Insider Erika Ashley Fisher sold 915 shares on May 4th at $236.66, a transaction tied to tax obligations from equity vesting.

On the institutional side, T. Rowe Price raised its stake by 36.5% in Q4, and AQR Capital Management more than doubled its position, up 117.6%. Institutional investors hold 90.39% of the stock.

HUBS has a market cap of $12.55 billion and a P/E ratio of 280.16.

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