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Can HubSpot (HUBS) Pull a Surprise This Earnings Season? - Analyst Blog

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Cloud-based inbound marketing and sales software platform provider, HubSpot, Inc.HUBS , is set to report first-quarter 2015 results on May 6. Last quarter, the company posted a positive earnings surprise of 2.82%. Let's see how things are shaping up for this announcement.

Factors to Consider

HubSpot is a provider of inbound marketing software platform that helps companies attract visitors to their websites, convert visitors into leads and close leads into customers. We are encouraged by the company's sustained focus on investing in new product developments and international expansion which will continue to drive its top line.

Furthermore, a continuous rise in HubSpot's revenue per user rate makes us optimistic about its top-line performance in the to-be-reported quarter. However, we remain cautious about HubSpot's bottom-line performance owing to higher customer acquisition costs.

Earnings Whispers?

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

Zacks ESP: The Earnings ESP for HubSpot is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss per share of 41 cents.

Zacks Rank: HubSpot has a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult.

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

Stocks to Consider

Here are a few companies worth considering which, as per our model, have the right combination of elements to post an earnings beat this quarter:

Walker & Dunlop, Inc. WD with an Earnings ESP of +20.00% and a Zacks Rank #1 (Strong Buy).

Agrium Inc. AGU with an Earnings ESP of +6.06% and a Zacks Rank #3.

Enphase Energy, Inc. ENPH with an Earnings ESP of +6.67% and a Zacks Rank #3.

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HUBSPOT INC (HUBS): Free Stock Analysis Report

AGRIUM INC (AGU): Free Stock Analysis Report

WALKER & DUNLOP (WD): Free Stock Analysis Report

ENPHASE ENERGY (ENPH): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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