Sam Boughedda

Investing.com — Kerrisdale Capital, an investment research company, gave investors a brief report Wednesday morning stating that a software developer was needed. HubSpot Inc Products of NYSE: are “flawed”, and “pricing can be expensive.”

Kerrisdale, a New York company, pointed out HubSpot’s inability to be profitable, intense competition and “stale product” as the reasons why it thinks HubSpot’s shares will fall soon.

Kerrsdale began a series tweets outlining the reasons for his actions. He stated that “we’re short $HUBS.” Send a report http://kerr.co/hubs. Traded at 20x fwd Rev, $HUBS benefited one-time from a COVID increase that raised shares six times. But fierce competition & stale products will lead to low growth / margins, long before the biz grows into its sky-high valuation.”

HubSpot shares closed Tuesday’s session trading at $680.20. Shares initially dropped to $654.53 in the wake of the report. The majority of the losses have been erased and shares trade at $681, slightly up today.

Both the share price of the company have increased dramatically since the beginning of the pandemic. It climbed to just over 70% in 2021. Its shares traded at $100 in March 2020. Kerrisdale stated that the COVID tailwind would fade, and future growth would depend upon expansion into already crowded market.

“Though HubSpot does have some devoted fans, its core technology – a database that can be used to create customized emails and web pages – is nothing special,” they added.

Kerrisdale views contrast with Goldman Sachs’s earlier Buy rating for the company. Gabriela Borges, a Goldman analyst set a price target of $953 for the stock. This implied that there would be a 32% upside. Borges stated that HubSpot will see further upside in the coming 5 years due to its strategy and execution, once it proves its ability expand beyond its marketing hub.