Squarespace Intrinsic Value – SquareSpace Stock Plunges 8% After Analyst Downgrade to “Sector Weight”
January 28, 2023
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Squarespace Intrinsic Value – SQUARESPACE ($NYSE:SQSP): SquareSpace is a publicly traded company that offers website building and hosting services. On Thursday, Josh Beck, a KeyBanc analyst, downgraded SquareSpace’s stock to “sector weight” (neutral) from “overweight” without assigning a price target. This move caused the company’s shares to plunge by almost 8% on Friday. Despite expressing his approval of SquareSpace’s management team, Beck cited his concern over the “reduced visibility” of potential growth initiatives, including branded payments. He believes that the branded payment initiative could be a long-term catalyst, but there is currently lack of visibility surrounding the project and its potential to impact the company’s bottom line. This downgrade by Beck comes at a time when the company is attempting to rebrand its business model and focus more on e-commerce and digital marketing. SquareSpace recently acquired Tock, a restaurant reservation system, and is looking to expand its offerings beyond website hosting and development.
However, Beck’s decision to downgrade SquareSpace’s stock may have been influenced by the company’s lack of progress in the mobile payments space. This has caused investors to question the company’s ability to execute on its growth initiatives. Overall, it appears that Beck’s decision to downgrade SquareSpace’s stock was motivated by concerns about the company’s lack of progress in the mobile payments space and the reduced visibility around its potential growth initiatives. Although SquareSpace has made some strides in rebranding its business model and expanding its offerings, investors may be hesitant to invest in the company until it can demonstrate more progress in the mobile payments space.
Market Price
On Friday, SQUARESPACE stock opened at $21.4 and closed at $21.1, dropping by 7.9% from its previous closing price of 22.9. This drop was the result of an analyst downgrade from “overweight” to “sector weight”. The news of the downgrade caused a significant decline in the stock’s price and most of the news surrounding the stock was negative at the time of writing. Given the decline in SQUARESPACE stock, investors are speculating about what this could mean for future returns. Many fear that the downgrade could be a sign of a future downturn as the stock looks unlikely to recover in the short-term.
Additionally, some analysts have pointed out that the downgrade could be a sign that the company’s performance is not meeting expectations. Overall, this analyst downgrade has caused SQUARESPACE stock to take a hit and investors are now watching closely to see how the company will respond to this news. With the stock having experience such a steep plunge in value, it remains to be seen if SQUARESPACE will be able to come back from this and regain some of its former value. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Squarespace. More…
| Total Revenues | Net Income | Net Margin |
| 845.58 | -34.57 | -4.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Squarespace. More…
| Operations | Investing | Financing |
| 140.11 | -9.59 | -118.4 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Squarespace. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 962.81 | 1.02k | -0.45 |
Key Ratios Snapshot
Some of the financial key ratios for Squarespace are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| – | – | 0.3% |
| FCF Margin | ROE | ROA |
| 15.0% | -3.1% | 0.2% |
VI Analysis – Squarespace Intrinsic Value
SQUARESPACE is a company that has long term potential based on its fundamentals, as determined by VI app. According to VI Line, the fair value of SQUARESPACE share is estimated to be around $34.2. Currently, the stock is trading at $21.1, which is 38% lower than its estimated fair value. This implies that the stock is currently undervalued and could potentially be a good buy for investors. Since SQUARESPACE’s fundamentals are strong, its long term potential should not be underestimated and investors should keep an eye on the stock for potential gain. The company should also continue to focus on improving its fundamentals and ensure its future growth. More…
VI Peers
In the world of website design and hosting, there is stiff competition between Squarespace Inc and its competitors: Justsystems Corp, Marin Software Inc, and Autodesk Inc. All four companies offer different plans and features for their customers, making it difficult for consumers to decide which one to use.
However, Squarespace Inc has always managed to stay ahead of the game, thanks to its user-friendly interface and innovative design templates.
– Justsystems Corp ($TSE:4686)
Justsystems Corp is a Japanese software company that specializes in artificial intelligence and document processing. The company has a market cap of 211.94B as of 2022 and a Return on Equity of 14.99%. Justsystems was founded in 1981 and is headquartered in Tokyo, Japan.
– Marin Software Inc ($NASDAQ:MRIN)
Marin Software Inc is a publicly traded digital advertising company. The company has a market capitalization of 19.34 million as of 2022 and a return on equity of -36.28%. The company provides a software platform that helps businesses manage their online advertising campaigns across multiple channels, including search, display, social, and mobile. The company was founded in 2006 and is headquartered in San Francisco, California.
– Autodesk Inc ($NASDAQ:ADSK)
Autodesk, Inc. is an American multinational software corporation that makes software for the architecture, engineering, construction, manufacturing, media, and entertainment industries. A market cap is a company’s total value, including shares outstanding and debt. Autodesk’s market cap is $49.39B as of 2022. Return on equity (ROE) is a financial ratio that measures the profitability of a company in relation to its shareholders’ equity. Autodesk’s ROE is 71.49%.
Summary
The recent news of analyst downgrade to “Sector Weight” for SquareSpace stock has caused an 8% plunge in the stock price. Investors should take this news into account when considering an investment in SquareSpace. At the time of writing, most news surrounding SquareSpace appears to be negative.
As such, investors should be prepared for potential further decreases in stock prices. It is important to do one’s own research and analysis before investing in any company, as the stock market can be unpredictable.
