Analyst Mike McGovern from Bank of America Securities reiterated a Buy rating on Squarespace (SQSP – Research Report) and increased the price target to $42.00 from $40.00.
Mike McGovern has given his Buy rating due to a combination of factors including Squarespace’s strong first-quarter performance and the positive financial outlook for the company. McGovern highlights the company’s revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) beating Bank of America’s expectations, as well as a robust growth in subscribers which surpassed estimates. Additionally, the favorable guidance for revenue and free cash flow (FCF) provided by management suggests Squarespace is on a steady upward trajectory, with projections outperforming previous market expectations.
McGovern also points out the significant impact of the strategic partnership with Google, which has resulted in increased referral traffic and high renewal rates. The introduction of new features like Squarespace Payments and the accelerated growth in Gross Payment Volume (GPV) further underscore the company’s momentum. McGovern’s raised growth estimates through 2025 reflect a stronger long-term growth profile, supported by the potential for price increases and a higher revenue multiple. Consequently, he has increased the price objective, underlining Squarespace’s prospects as more promising compared to peers like Wix and GoDaddy.
In another report released today, JMP Securities also reiterated a Buy rating on the stock with a $45.00 price target.
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Squarespace (SQSP) Company Description:
Squarespace Inc is an all-in-one platform for businesses and independent creators to build an online presence, grow their brands and manage their businesses across the internet. It offers websites, domains, e-commerce, tools for managing a social media presence, marketing tools, and scheduling capabilities. The company primarily derives revenue from monthly and annual subscriptions. Revenue is also derived from non-subscription services including fixed fees earned on revenue share arrangements with third parties and fixed transaction fees that it earns on sales made through customers’ websites.
