Why Did HubSpot Fall 26% in January?
Shares of HubSpot (NYSE: HUBS) dropped 25.8% in January, according to data from S&P Global Market Intelligence. It was one of many stocks that sustained deep losses without the business reporting any sort of bad news. Multiple years of growth stock momentum have been reversing in recent months, and investors are moving capital away from growth stocks. HubSpot's valuation was too high to hold up in these market conditions.
HubSpot is doing plenty of things well. The company grew 49% in its last quarter, and its adjusted earnings exceeded Wall Street's expectations. While HubSpot was unprofitable on an accounting basis, it produced positive free cash flow. It's also securing future growth opportunities with new products. Adding billing and payment transfer functions to the platform will allow HubSpot's customers to address a key pain point.
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