As we reflect back on the just completed Q3 sales software sector earnings season, we dig into the relative performance of HubSpot (NYSE:HUBS) and its peers.
Companies need to be able to interact with and sell to their customers as efficiently as possible. This reality, coupled with the ongoing migration of enterprises to the cloud drives demand for cloud-based customer relationship management (CRM) software that integrate data analytics with sales and marketing functions.
The 5 sales software stocks we track reported a strong Q3; on average, revenues beat analyst consensus estimates by 4.39%, while on average next quarter revenue guidance was 2.42% above consensus. But technology stocks have been hit hard on fears of higher interest rates and sales software stocks have not been spared, with share price down 27.6% since earnings, on average.
HubSpot (NYSE:HUBS)
Started by two MIT grad students, HubSpot (NYSE:HUBS) is a software as a service platform that helps small and medium-size businesses sell, market themselves, and get found on the internet.
HubSpot reported revenues of $339.1 million, up 48.5% year on year, beating analyst expectations by 3.88%. It was a solid quarter for the company, with an exceptional revenue growth and a decent beat of analyst estimates.
"At this year's annual Analyst Day, I provided an overview of our long-term growth strategy and introduced the four strategic pillars that are guiding our investments into the future," said Yamini Rangan, Chief Executive Officer at HubSpot.
The stock is down 30.9% since the results and currently trades at $535.
We think HubSpot is a good business, but is it a buy today? Read our full report here, it's free.
Best Q3: ZoomInfo (NASDAQ:ZI)
Founded as DiscoveryOrg and renamed after a merger in 2019, ZoomInfo (NASDAQ:ZI) is a software as a service product that provides sales departments with access to a database of prospective clients.
ZoomInfo reported revenues of $197.6 million, up 60.1% year on year, beating analyst expectations by 7.5%. It was a very strong quarter for the company, with an accelerating revenue growth and a very optimistic guidance for the next quarter.
ZoomInfo scored the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The company added 150 enterprise customers paying more than $100,000 annually to a total of 1,250. The stock is down 19.6% since the results and currently trades at $54.90.
Is now the time to buy ZoomInfo? Access our full analysis of the earnings results here, it's free.
Weakest Q3: Salesforce (NYSE:CRM)
Launched in 1999 from a rented one-bedroom apartment in San Francisco by Marc Benioff and his three co-founders, Salesforce (NYSE:CRM) is a software as a service platform that helps companies access, manage and share sales information.
Salesforce reported revenues of $6.86 billion, up 26.6% year on year, in line with analyst expectations. It was a decent quarter for the company, with a solid revenue growth but a weak guidance.
Salesforce had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 18.8% since the results and currently trades at $231.40.
Read our full analysis of Salesforce's results here.
Zendesk (NYSE:ZEN)
Founded by three Danish friends who got tired of implementing complex old-school solutions, Zendesk (NYSE:ZEN) is a software as a service platform that makes it easier for companies to provide help and support to their customers.
Zendesk reported revenues of $346.9 million, up 32.4% year on year, beating analyst expectations by 3.47%. It was a solid quarter for the company, with a strong top line growth.
The stock is down 15.8% since the results and currently trades at $100.12.
Read our full, actionable report on Zendesk here, it's free.
Freshworks (NASDAQ:FRSH)
Founded in Chennai, India in 2010 with the idea of creating a “fresh” helpdesk product, Freshworks (NASDAQ: FRSH) offers a broad range of software targeted at small and medium sized businesses.
Freshworks reported revenues of $96.6 million, up 45.9% year on year, beating analyst expectations by 6.26%. It was a very strong quarter for the company, with an exceptional revenue growth.
Freshworks had the weakest full year guidance update among the peers. The stock is down 52.7% since the results and currently trades at $23.65.
Read our full, actionable report on Freshworks here, it's free.
The author has no position in any of the stocks mentioned