It seems that a deal between Google parent Alphabet (NASDAQ:GOOGL) and HubSpot (NYSE:HUBS) is still not off the table. According to a Bloomberg exclusive report, Google is in advanced discussions with the customer relationship management (CRM) company. The report stated that the tech giant has already discussed the terms of the potential deal with HubSpot.
The talks are still going on and there is no certainty that both the companies will move forward with the deal. There is also the possibility that another potential suitor could emerge for HUBS. The report stated that if the deal takes place, it could be one of the biggest takeovers this year. Shares of HUBS have soared by more than 30% over the past year and the company currently has a market cap of around $30.5 billion.
Why Could Google Be Interested in HUBS?
The acquisition of HubSpot could enhance GOOGL’s competitiveness against other players in the CRM market like Microsoft (NASDAQ:MSFT). This is because HUBS focuses on smaller businesses with its CRM platform.
Analysts’ Views on the Deal
When the strong buzz about this deal emerged last month, overall, analysts were upbeat about the deal but believed that regulatory hurdles would remain. Oppenheimer analyst Ken Wong views the acquisition as “highly unlikely.” Evercore ISI’s analyst Mark Mahaney believes that GOOGL may face numerous obstacles in the acquisition process and suggested that Alphabet establish a standalone software business to bypass the regulatory challenges.
Is HUBS Stock a Good Buy?
Analysts remain bullish about HUBS stock, with a Strong Buy consensus rating based on 22 Buys, three Holds, and one Sell. The average HUBS price target of $705.95 implies an upside potential of 17.5% from current levels.
