Here we go again: another home run earnings quarter for HubSpot (NYSE:HUBS), another rally that takes it to new all-time highs. The pattern is a familiar one for investors now. There's no doubt that HubSpot is one of the fastest organically growing companies at its scale. With a ~$500 million run rate and still growing at ~40%, with improving margins and strong FCF results to boot, what's not to like about HubSpot?

There's no question as to HubSpot's quality as a company. Customers love it, investors love it, Wall Street loves it - the bullish views are well supported by fundamentals. But something that all three of these parties may ignore from time to time is valuation. It's fine if HubSpot's stock price rises in tandem with its growth (roughly meaning its EV/forward revenues multiple remains constant as both revenues and market cap/enterprise value expand in tandem), but HubSpot has seen a continuous "multiples expansion" over the past year that leaves it in a precarious position. At 7.8x EV/FY18 revenues, based on the company's new guidance range for the current year, HubSpot is an unattractive stock for the very same reason that Workday (NYSE:WDAY) is: great company, bad price.

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