HubSpot gave investors a first-quarter report that showed several positive headline numbers, but Bank of America came away focused on a different part of the story.
The firm downgraded HubSpot to underperform from buy and cut its price objective to $180 from $300, arguing that the company’s changing go-to-market strategy brings a new layer of execution risk
The call came after HubSpot’s first-quarter results and management commentary, which Bank of America said made its prior bullish stance look early. “We now believe our bullish call was premature,” the firm said in a Bank of America note given to TheStreet. The note said the biggest surprise from the quarter was HubSpot’s move toward an agent-first go-to-market model, with sales representatives expected to position AI agents at the top of the sales conversation instead of leading with the company’s traditional products. Bank of America said the shift may be strategically sound over the long term, though the timing creates near-term uncertainty because HubSpot is also changing its pricing and packaging model.
Bank of America says HubSpot’s sales shift could pressure growth Bank of America’s concern is less about whether HubSpot can benefit from AI over time and more about how smoothly the company can change the way its sales organization operates. The firm said HubSpot is reorienting its sales motion toward AI agents, following the company’s April introduction of a new outcomes-based pricing model for AI agents. That change, according to Bank of America, could make the company’s path to a second-half growth reacceleration harder to prove.