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HubSpot (HUBS) Q4 Earnings: What's in the Cards this Time?

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HubSpot, Inc. (HUBS - Free Report) is set to release its fourth-quarter 2016 earnings on Feb 14. In the last quarter, the company reported a positive earnings surprise of 16.67%. We note that the company has delivered positive earnings surprises in each of the last four quarters resulting in an average positive surprise of 15.34%.

Shares of HubSpot have outperformed the broader Zacks Internet Software industry over the last one year. While the industry gained 31.9%, the stock appreciated 99.9%.

Let’s see how things are shaping up for this announcement.

Factors to Consider    

HubSpot is an inbound marketing software platform that helps companies to attract visitors to their websites, convert visitors into leads, and close leads into customers.

In November, HubSpot announced at its annual event INBOUND the availability of HubSpot Marketing Free. This no cost tool within HubSpotMarketing enables marketers convert website traffic into leads with the help of pop-up forms, analytics, dashboard and contact insights. The move is expected to have helped HubSpot gain greater traction in the inbound marketing software space around the world and boosted adoption rates. The impact is likely to be reflected in its bottom line in the soon-to-be reported quarter.

Also, the company introduced many new features within its various marketing, sales and CRM products at the same event that remain positives.

However, a competitive landscape and a rapidly changing technology scene remain concerns for the company.

Earnings Whispers?

Our proven model does not conclusively show that HubSpot is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.

Zacks ESP: HubSpot’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 47 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: HubSpot carries a Zacks Rank #3, which when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

HubSpot, Inc. Price and Consensus

Stocks to Consider

Here are some companies that, as per our model, that have the right combination of elements to post an earnings beat this quarter:

Applied Optoelectronics Inc. (AAOI - Free Report) with an Earnings ESP of +15.87% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carbonite, Inc. with an Earnings ESP of +100.00% and a Zacks Rank #1.

ARRIS International plc with an Earnings ESP of +1.56% and a Zacks Rank #2.

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