RBC Capital has lowered its recommendation on HubSpot Inc (NYSE:HUBS), moving the stock from Outperform to Sector Perform and cutting the price target sharply to $189.00 from $322.00. The revised target equates to a roughly 10% discount to HubSpot's then-current market price of $209.33. Shares of the company have fallen more than 73% over the last 12 months and were trading near their 52-week low of $207.20 at the time of the update.
RBC analyst Rishi Jaluria framed the downgrade around a recalibration of the firm's view on the balance of risk and reward for HubSpot at its present multiple, saying the firm sees "a more balanced degree of risk in the risk/reward setup for shares at the current multiple." The note reduced the target price substantially and tied that new target to a valuation multiple of 12.5 times RBC's revised 2027 EPS estimate.
In the research note, RBC also referenced concerns that could pressure the company's business metrics, including an observation that stronger-than-expected membership growth through AEP could impact Humana's Medicare Advantage book, potentially creating cost pressure above prior guidance for 2026 MCR. That comment accompanied RBC's broader caution about an uneven reimbursement backdrop and outsized growth trends.
Despite the downgrade, company-level fundamentals cited in market data remain notable. InvestingPro information referenced in the research shows HubSpot reporting gross profit margins of 84% and holding more cash than debt on the balance sheet. Those metrics were weighed against RBC's valuation reset.
The new $189 price target implies a valuation based on a 12.5x multiple of RBC's 2027 EPS estimate, a significant reduction from the prior $322 objective. RBC's reassessment reflects a more conservative posture on HubSpot's prospects given the current market conditions and the company's growth trajectory.
Market-facing analytics included with the firm's coverage indicated additional context: InvestingPro analysis flagged the stock as appearing undervalued versus its Fair Value and noted technical indicators consistent with oversold territory. InvestingPro also listed 14 supplemental investment tips for HUBS and offers Pro Research Reports that synthesize data for investors.
Operationally, HubSpot reported strong fourth-quarter 2025 results that nevertheless sit alongside the downgrade. The company posted GAAP earnings per share of $3.10, ahead of the $2.99 consensus, and revenue of $846.7 million versus a projected $830.61 million. Management also provided an annual revenue forecast that exceeded analyst estimates, contributing to a generally positive set of fundamentals.
In the wake of the results, William Blair maintained an Outperform rating on HubSpot, expressing a favorable outlook while noting sector-wide concerns about the possible implications of artificial intelligence. That continued endorsement indicates at least one major house retains conviction in HubSpot's strategic positioning despite RBC's more cautious stance.
RBC's downgrade and target reduction underline how differing analyst interpretations of growth, margin durability, and external pressures can produce material changes in valuation and recommendations. For investors, the decision highlights a split view: strong near-term results and healthy margins on one side, and a reassessed valuation framework and risk profile on the other.
Contextual note: The information above reflects the ratings action, price target change, company results, and third-party analytics as reported in the research and market data cited.