Today, a smattering of growth stocks are seeing impressive investor interest. Among the big winners in today’s rally is HubSpot (NYSE:HUBS). Currently, HUBS stock is up more than 18% at the time of writing.
This impressive price action for HubSpot appears to be the result of a culmination of factors. As a key provider of cloud-based customer relationship management (CRM) software for businesses around the world, HubSpot appears to be in the sweet spot for most growth investors. This is a company with a business model driven by growth in search engine optimization, website content management, messaging and a range of other businesses.
Accordingly, there’s no doubt that investors looking for the companies of the future will like this stock. As the digitization trend unfolds, investors are focusing on companies supporting this trend. Thus, it appears HUBS stock is a pick-and-shovel play on a fast-growing sector.
However, the real catalyst driving HUBS stock higher today appears to be an analyst upgrade. Let’s dive into the significance of this upgrade and why investors are growing bullish on HUBS stock right now.
HUBS Stock Surges on Analyst Upgrade
Today, a Wells Fargo analyst updated his price target meaningfully on HUBS stock. The research arm of Wells Fargo upped their target from $675 to $750, a move that took this stock from yesterday’s close around $680 to more than $800 today.
Indeed, stocks receive upgrades for various reasons. Analysts can find themselves behind the curve and upgrade fast-growing companies to meet the market’s expectation of growth. In the case of HubSpot, it appears this stock is on a trajectory detached from where analysts see this company’s growth.
The market consensus for HubSpot’s growth potential appears to be immense. Other analysts have boosted their stock prices dramatically of late, but all remain behind where HubSpot is trading now.
Does this mean HUBS stock is overvalued? Time will tell. However, the momentum an exuberance in this stock is notable today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.