Sales software stocks led by HubSpot (NYSE:HUBS)

Quarterly results are a good time to check a company’s progress, especially compared to peers in the same sector. Today we look at HubSpot (NYSE:HUBS) and the best and worst performers in the sales software industry.

Companies must be able to communicate with their customers and sell to their customers as efficiently as possible. This reality, coupled with the continued migration of enterprises to the cloud, is driving demand for cloud-based CRM (Customer Relationship Management) software that integrates data analytics with sales and marketing functions.

The four sales software stocks we track reported a strong second quarter. As a group, revenues exceeded analyst consensus expectations by 2.6%, while revenue expectations for the next quarter were in line.

Amid this news, companies’ stock prices have gone through a rough patch. On average, they are down 7.8% since the last earnings results.

Born from the idea that traditional interruptive marketing was becoming less effective, HubSpot (NYSE:HUBS) offers an integrated platform that helps companies attract, engage and manage customer relationships through marketing, sales, service and content management tools.

HubSpot reported revenue of $760.9 million, up 19.4% year over year. This print exceeded analyst expectations by 2.9%. Overall, it was a very strong quarter for the company, with a solid increase in analyst expectations and an impressive increase in analyst EBITDA estimates.

“The second quarter was another solid quarter of continued revenue growth and customer expansion,” said Yamini Rangan, Chief Executive Officer at HubSpot.

HubSpot scored the fastest revenue growth of the entire group. The company added 9,724 customers for a total of 267,982. However, investor expectations were likely higher than Wall Street’s published projections, leaving some wanting even better results (analyst consensus estimates are those published by major banks and consulting firms, not by the investors who make buying and selling decisions). The stock is down 4.2% since reporting and is currently trading at $470.

Is Now the Time to Buy HubSpot? See our full analysis of the revenue results here. This is free for active Edge members.

Freshworks (NASDAQ:FRSH) started as a customer service solution before expanding into a comprehensive software suite, offering AI-powered software-as-a-service solutions that help companies manage customer service, IT support, sales and marketing functions.

Freshworks reported revenue of $204.7 million, up 17.5% year over year, and beat analyst expectations by 2.9%. The company had a strong quarter, with EBITDA estimates and EPS guidance for the next quarter exceeding analyst expectations.

Freshworks scored the highest full-year guidance increase among its peers. The company added 700 business customers paying more than $5,000 annually, bringing the total to 23,975. While it had a good quarter compared to its peers, the market seems unhappy with the results as the stock is down 18% since reporting. It is currently trading at $11.40.

Is Now the Time to Buy Freshworks? See our full analysis of the revenue results here. This is free for active Edge members.

With its cloud-based platform, named after the stock market symbol CRM (Customer Relationship Management), Salesforce (NYSE:CRM) offers customer relationship management software that helps companies connect with their customers through sales, service, marketing and commerce.

Salesforce reported revenue of $10.24 billion, up 9.8% year over year, beating analyst expectations by 1%. Still, it was a mixed quarter as analyst expectations were missed.

Salesforce delivered the weakest performance against analyst estimates and the weakest full-year guidance update in the group. The stock is flat since the results and is currently trading at $255.10.

Read our full analysis of Salesforce’s results here.

ZoomInfo (NASDAQ:GTM) operates a platform it calls “RevOS” – short for Revenue Operating System – and provides sales, marketing and recruiting teams with business intelligence and analytics to identify potential customers and provide targeted outreach.

ZoomInfo reported revenue of $306.7 million, up 5.2% year over year. This number exceeded analyst expectations by 3.5%. Zooming out, it was a satisfying quarter as it also saw accelerated growth among large customers, but EPS guidance for the next quarter fell short of analyst expectations.

ZoomInfo earned the highest earnings estimates from analysts, but had the slowest revenue growth among its peers. The company added 16 business customers paying more than $100,000 annually, bringing the total to 1,884. The stock is down 8.5% since reporting and is currently trading at $11.12.

Read our full, actionable report on ZoomInfo here, it’s free for active Edge members.

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has fallen from its frothy post-pandemic levels. Overall price growth for goods and services has been trending toward the Fed’s 2% target lately, which is good news. The higher interest rates that combated inflation also did not slow economic activity enough to catalyze a recession. A soft landing so far. This, combined with recent interest rate cuts (half a percent in September 2024 and a quarter of a percent in November 2024) has led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the US presidential election in early November, sending major indices to record highs in the week after the election. Still, debates remain about the health of the economy and the impact of potential rate cuts and corporate tax cuts, leaving a lot of uncertainty around 2025.

Do you want to invest in winners with rock-solid fundamentals? Check out our 9 best stocks that are beating the market and add them to your watchlist. These companies are primed for growth regardless of the political or macroeconomic environment.

StockStory is growing and hiring equity analysts and marketing positions. Are you a 0-on-1 builder with a passion for the markets and AI? View the open positions here.