HUBS: into AI?


s tech titans like (AMZN), IBM (IBM), Facebook (FB) and Google parent Alphabet (GOOGL) dive deeper into artificial intelligence, investors should also keep an eye on 2014 IPO HubSpot (HUBS), which has just made two acquisitions focused on AI and machine-learning technologies.

HubSpot is a leading provider of inbound-marketing, sales and customer relationship management (CRM) solutions, with over 34,000 total customers and more than 3,400 agency partners.

In July, HubSpot acquired Kemvi, a startup focused on using AI and machine learning to help sales representatives deepen relationships with potential buyers.

Today, the Cambridge, Mass.-based company also announced it was buying Motion AI, a top visual-chatbot builder whose technology allows anyone to create chatbots on Facebook Messenger, Slack and other platforms.

HubSpot said Motion AI’s intelligent chatbots can be used to qualify sales leads, book meetings and handle customer service issues.

While HubSpot’s Q2 revenue of $89 million is a rounding error compared to last quarter’s sales for Amazon ($38 billion), Alphabet ($26 billion) and Facebook ($9.3 billion), it’s been growing its top line at a 52% annual pace over the last three years.

The company has shown a strong rebound in EPS growth, with triple-digit gains of 127% and 200% in the last two reports. But keep in mind that those increases are based on comparisons with year-over-year quarters with no earnings.

Consensus-analyst estimates call for a 500% spike in earnings for 2018. HubSpot is expected to report Q3 numbers at the end of October.

Testing A New Buy Zone

Like many new IPO stocks, HubSpot has had a rocky journey since its market debut in October 2014. But the stock has be trending higher since the end of last year and is now working on an early-stage flat base with a 76.20 buy point.

Growth ratings:
Ok, not the best (yet)

Composite Rating 93 Neutral
EPS Rating 80 Pass
RS Rating 89 Pass
Group RS Rating A Pass
SMR Rating D Fail
Acc/Dis Rating B Pass