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- This Once-Perfect SaaS Darling Is Learning How To Be Boring Again, and That's Okay
This Once-Perfect SaaS Darling Is Learning How To Be Boring Again, and That's Okay
Noah Zelvis
December 27, 2025
High-growth software stocks do not usually get punished this hard unless expectations were stretched to the breaking point.
When markets turn impatient, anything that looks expensive, incremental, or hard to monetize gets thrown out first and analyzed later.
The next phase is less about vision and more about proving that steady execution still matters.
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What Just Happened
HubSpot Inc (NYSE: HUBS) shares bounced modestly after Jefferies published a positive outlook for 2026, arguing that most AI-related concerns are already reflected in the stock.
The firm pointed out that after a roughly 50% multiple compression in 2025, expectations have come down to a level where solid execution could gradually rebuild confidence.
The stock popped on the note, then cooled. That reaction tells you something important. Investors viewed the call as credible, but not transformational.
This was not a new narrative. It was reinforcement of a repair story already in progress.
That context matters. The stock is down more than 40% this year and trades roughly 50% below its highs. Even so, Wall Street is no longer debating whether the business is broken.
The debate is whether steady 20% growth and margin expansion are enough to justify a higher multiple again.
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The Business
At its core, this company sells a customer platform.
Marketing, sales, service, and content management all live under one roof, designed primarily for small and mid-sized businesses that want something simpler than enterprise software but more powerful than point tools.
The model has always been land and expand. Bring customers in with one hub, then layer in more seats, more functionality, and more automation over time.
That strategy still works. The question is how efficiently it works as the platform matures.
In recent years, management has pushed upmarket, added AI features, and expanded into broader go-to-market tooling.
That added complexity and cost at the same time the market started demanding faster payback from software spending.
The result was a perception problem. Growth did not disappear, but the margin story lagged, and the valuation paid the price.
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Why The Market Turned On It
The reset was not about revenue collapsing. It was about trust.
For years, investors treated this as a premium growth name that could reinvest aggressively without scrutiny.
That worked when capital was cheap and growth was scarce. It stopped working when software buyers started asking tougher questions about ROI.
At the same time, AI hype distorted expectations. Some investors wanted immediate monetization.
Others worried that new AI tools would disrupt traditional inbound marketing altogether. Neither extreme played out, but uncertainty was enough to compress the multiple.
The stock did not fall because the business stopped working. It fell because the market stopped giving it the benefit of the doubt.
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What The Jefferies Call Really Signals
The Jefferies note did not introduce a new catalyst. It reframed expectations.
The core argument is simple.
If the company can deliver another year of roughly 20% growth, continue expanding margins, and show that AI investments support revenue rather than dilute it, the stock does not need heroics to recover.
That is a meaningful shift. The bar is no longer hypergrowth. It is competence plus discipline.
This also explains why the move was muted. Investors are waiting for proof, not promises.
The Setup In The Stock
At current levels, the stock trades more like a solid software operator than a category-defining disruptor. That cuts both ways.
On the positive side, expectations are lower. Execution does not have to be perfect to surprise to the upside.
On the negative side, there is less tolerance for missteps. Any sign that growth is slipping faster than margins are improving will get punished.
Volatility reflects that tension. The stock has seen nearly twenty moves of more than 5% in the past year. This is no longer a sleepy compounder. It is a debate stock.
Why Bulls Still Care
The customer base is sticky
Once businesses build workflows around a CRM and marketing platform, switching costs rise. That gives the company time to improve economics without losing customers.Growth is still real
High-teens to low-20s growth is not trivial at this scale. Many peers would gladly trade places.Margins are moving the right way
Operating leverage is starting to show. If margin expansion continues alongside stable growth, cash generation becomes harder to ignore.AI can be additive, not destructive
AI agents, automation, and smarter content tools can increase value per customer if priced and packaged correctly. The concern that AI would hollow out demand has eased.Lower expectations create upside
The stock does not need to return to old highs to deliver strong returns. A modest rerating combined with steady growth could do the job.
Why Bears Still Worry
The platform is no longer novel
Competition is intense. CRM, marketing automation, and customer tools are crowded markets with improving alternatives.AI spending must pay off
If AI features fail to materially boost revenue or retention, they become a cost center rather than a growth driver.Upmarket expansion is harder
Moving into larger customers increases deal sizes but also raises expectations around customization, support, and pricing pressure.The past still lingers
Investors burned by the drawdown are slower to re-engage. Sentiment repair takes time.
What To Watch Next
Revenue growth consistency
Anything close to 20% keeps the recovery thesis intact.
Margin progression
This is the credibility metric. Steady improvement matters more than one-off beats.
AI monetization clarity
Usage is nice. Revenue impact is better. Investors want to see the bridge.
Upmarket traction
Larger deals that do not erode margins would be a strong signal.
Tone from management
Less storytelling, more operating detail. Specific targets build trust.
How I’d Think About Position Size
This is not a momentum trade. It is a repair trade.
Starter if you believe steady execution will be rewarded again and want exposure while expectations are muted.
Add only on confirmation if growth holds, margins expand, and AI spend proves productive.
Step aside if growth slips into the low teens without offsetting profitability gains.
Patience matters here more than timing.
Valuation With Fewer Assumptions
The bull case no longer relies on domination or explosive growth. It relies on something simpler.
Grow at a respectable pace. Improve margins. Generate cash. Prove AI is additive.
Do that, and the stock does not need multiple expansion miracles to work. It just needs consistency.
Fail to do that, and the market will continue treating it as a good company that no longer deserves a premium.
The Bottom Line
This is no longer the market’s favorite SaaS story. That might actually be the opportunity.
The business is still growing, still sticky, and increasingly disciplined. What it lacks is excitement, and right now, that might be a feature rather than a bug.
If management executes and keeps delivering boring, measurable progress, sentiment can heal. Not overnight, but steadily.
In a market that has punished ambition without payoff, that could be enough.
Action Recap
✅ Starter: Small position if you believe execution beats hype
✅ Add On Proof: Stable growth plus margin expansion plus AI revenue clarity
⚠️ Trim On Trouble: Growth deceleration without profitability offset
👀 Watch Next: Margins, AI monetization, and upmarket deal quality
That's our coverage for today; thanks for reading! Reply to this email with feedback or any tech stocks you want me to check out.
Best Regards,
—Noah Zelvis
Tech Stock Insider