HubSpot (NYSE: HUBS) shares plummeted 15.44% in early trading on Thursday, following the release of its third-quarter earnings report and subsequent analyst downgrades. The sharp decline comes despite the company reporting better-than-expected Q3 results, highlighting investors' concerns over future growth prospects and valuation.

The customer relationship management (CRM) software provider posted impressive Q3 numbers, with adjusted earnings per share of $2.66, surpassing the consensus estimate of $2.58. Revenue for the quarter came in at $809.52 million, beating analyst projections of $786.55 million and marking a 20.87% year-over-year growth. However, HubSpot's forward guidance appears to have spooked investors, overshadowing the strong Q3 performance.

HubSpot's Q4 revenue forecast of $828 million to $830 million implies an 18% year-over-year growth, signaling a slowdown from the current quarter's pace. This projected deceleration in growth rate, despite still being impressive, has led to a reassessment of HubSpot's valuation amid broader economic uncertainties and intensifying competition in the CRM space. Adding to investor concerns, several prominent analysts, including those from Piper Sandler, JP Morgan, Canaccord Genuity, Jefferies, and Raymond James, have cut their target prices for HubSpot stock, further fueling the sell-off.