With the business potentially at an important milestone, we thought we'd take a closer look at Squarespace, Inc.'s (NYSE:SQSP) future prospects. Squarespace, Inc. operates platform for businesses and independent creators to build online presence, grow their brands, and manage their businesses across the internet. With the latest financial year loss of US$250m and a trailing-twelve-month loss of US$43m, the US$2.9b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Squarespace's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts' expectations for the company.

See our latest analysis for Squarespace

Consensus from 15 of the American IT analysts is that Squarespace is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$11m in 2022. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 49% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won't go into details of Squarespace's upcoming projects, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there's one issue worth mentioning. Squarespace currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are too many aspects of Squarespace to cover in one brief article, but the key fundamentals for the company can all be found in one place – Squarespace's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:

1. Valuation: What is Squarespace worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Squarespace is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Squarespace's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.