HubSpot's Adoption Of Google Cloud To Expand Europe Presence

HubSpot (NYSE:HUBS) recently announced that the company will adopt Google Cloud in order to strengthen its international cloud infrastructure. The extended partnership with Alphabet (NASDAQ:GOOGL) division Google will help it rapidly penetrate the small and medium business (SMB) market in Europe.

The partnership will provide enhanced data security, speed and reliability to HubSpot’s platform, which will expand customer base, eventually driving top-line growth. Moreover, adoption of Google cloud is expected to lower costs, which is likely to boost profitability. Additionally, the partnership will enable the company to invest more in its ongoing Google Cloud product integrations.

Shares of Hubspot have gained 79.2% on a year-over-year basis significantly outperforming the 27.6% rally of the industry it belongs to.

Europe Expansion to Drive Growth

HubSpot is expanding international footprint rapidly. The company opened a new office in Berlin in second-half 2017. We believe the usage of Google Cloud Frankfurt region will help the company further expand footprint in European markets, which will boost customer base.

The company has been continuously striving to expand customer base, which increased 48% in the last reported quarter. Rapid adoption of Hubspot One and Hubspot’s CRM tools were key catalysts.

HubSpot’s product portfolio is gaining from integration with Shopify and Facebook (NASDAQ:FB) , which leverages artificial intelligence (AI). Moreover, the acquisitions of Motion AI and Kemvi reflect the company’s focus on integrating AI into its portfolio.

Moreover, HubSpot remains optimistic about the upcoming launch of Customer Hub.

Zacks Rank & Stocks to Consider

HubSpot has a Zacks Rank #4 (Sell).

A couple of better-ranked stocks in the broader technology sector are Paycom Software (NYSE:PAYC) and Facebook. While Paycom sports a Zacks Rank #1 (Strong Buy), Facebook carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Facebook and Paycom have a long-term expected earnings growth rate of 26.51% and 25.75%, respectively.

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