Salesforce vs. HubSpot: Which CRM Stock Is the Smarter Buy Now?

Globe and Mail

7 days ago

Salesforce, Inc. CRM and HubSpot, Inc. HUBS are two of the most recognized names in customer relationship management (CRM) software. Both are cloud-based platforms that help businesses attract, convert and retain customers. However, they serve different ends of the market. Salesforce is the dominant force among large enterprises, while HubSpot is making strong inroads with small and mid-sized businesses (SMBs).
As investors search for sustainable winners in enterprise tech, a deeper look into each company's fundamentals, growth outlook and valuation helps determine which of these CRM stocks offers stronger long-term potential.
Salesforce: CRM Giant but Slowing Growth Warrants Caution
Salesforce continues to dominate the CRM market, outpacing rivals like Microsoft, Oracle and SAP. Over the years, Salesforce has built a strong and interconnected platform. The acquisition of Informatica, Zoomin and Own Company shows its intent to move beyond its position as a CRM software maker and become a broader enterprise software provider focused on artificial intelligence (AI), data and collaboration.
AI is now central to Salesforce's growth plan. Since rolling out Einstein GPT in 2023, the company has embedded generative AI into its platform to help businesses automate processes, improve decisions and offer better customer experiences. As AI adoption rises across industries, Salesforce is well-placed to benefit from the same.
Its latest innovation, Agentforce, reflects that momentum. Paired with its Data Cloud, Agentforce has already hit $100 million in annualized revenues just two quarters after launch. More than 4,000 customers are using it for various tasks in sales, service and marketing. Data Cloud is also expanding fast, with annual recurring revenues growing more than 120% year over year. Salesforce's broader strategy of bringing apps, data and AI agents under one umbrella gives it a strong edge.
However, Salesforce's biggest challenge right now is slowing sales growth. For years, the company has delivered double-digit revenue increases. However, that pace has now cooled to single digits. In the first quarter of fiscal 2026, revenues rose just 7.7% from a year ago, and non-GAAP earnings per share (EPS) grew by only 5.7%.
This slowdown reflects cautious enterprise spending amid economic uncertainty and geopolitical pressures. Analysts anticipate that this trend will persist, with mid-to-high single-digit revenue growth expected for fiscal 2026 and 2027. Non-GAAP EPS is expected to grow at a low double-digit rate for the two fiscals.
HubSpot: A Fast-Moving Player in the CRM Market
HubSpot has carved out a strong position by focusing on ease of use, affordability and a highly integrated platform tailored for smaller and mid-sized businesses. Its all-in-one offering for marketing, sales, customer service and content management is driving financial performance. In the first quarter of 2025, the company's revenues and non-GAAP EPS increased 15.7% and 5.9%, respectively, on a year-over-year basis.
HubSpot is also investing heavily in AI features, workflow automation and advanced reporting to appeal to larger mid-market customers. This strategic positioning gives HubSpot a lot of room to expand, especially as more SMBs digitize their sales and customer operations.
Additionally, HubSpot's App Marketplace offers a customer-centric solution by making it simple for companies to find and seamlessly connect and integrate solutions to grow their businesses. As companies prioritize a digital-first approach, it is likely to create more opportunities for developers to build new integrations that support every stage of the customer journey.
Analysts' estimates for the top and bottom lines suggest that HubSpot is likely to grow at a faster pace than Salesforce. The Zacks Consensus Estimate suggests mid-teen percentage growth for 2025 and 2026 revenues. Non-GAAP EPS is forecasted to rise in the mid-teen percentage range for 2025 and in the low 20s for 2026.
HUBS' Premium Price: Worth Paying for the Growth?
On the valuation front, HubSpot trades at 8.75 times forward sales compared to 5.84 times for Salesforce. While HubSpot looks more expensive, its higher growth momentum justifies the premium. Salesforce's lower valuation reflects its risks, including slowing sales growth and macroeconomic headwinds.
Conclusion: HUBS Is the Better Pick Right Now
Both Salesforce and HubSpot are strong companies with good business models, but they are at different points in their growth paths. Salesforce is more mature and is facing growth challenges, while HubSpot continues to grow at a steady pace. For long-term investors who want consistent performance, HubSpot looks like the smarter investment choice today, even at a higher valuation.
Currently, HubSpot sports a Zacks Rank #1 (Strong Buy), making the stock a must-pick compared to Salesforce, which has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here.
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Salesforce Inc. (CRM): Free Stock Analysis Report
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