There is upside to Squarespace Inc’s SQSP stock, given the company’s robust top-line growth, predictable revenue base, global expansion, margin expansion, upmarket initiatives and penetration of a large market opportunity, according to BofA Securities.
The Squarespace Analyst: Nat Schindler initiated coverage on Squarespace with a Buy rating and a price target of $73.
The Squarespace Thesis: The company appears poised to gain market share, with the rapid growth of penetration of internet users and e-commerce, Schindler said in the initiation note.
The analyst mentioned 5 factors for recommending Squarespace:
- A predictable business model that lends high visibility
- Expansion in the international markets
- Tailwinds from growth in e-commerce
- Upmarket initiatives to serve larger businesses
- Higher gross margins than peers, with potential for margin expansion
“We estimate a 22% average annual revenue growth over the next three years as Squarespace expands internationally and executes upmarket initiatives,” he added.
SQSP Price Action: Shares of Squarespace had risen by 3.46% to $54.08 at the time of publication Monday.
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