11305

Squarespace Earnings: What To Look For From SQSP


Adam Hejl /
2022/05/11 7:53 am EDT

Website and ecommerce tools provider Squarespace (NYSE:SQSP) will be reporting results tomorrow morning. Here's what investors should know.

Last quarter Squarespace reported revenues of $207.4 million, up 20.3% year on year, in line with analyst expectations. It was a weak quarter for the company, with the guidance for both the next quarter and the full year below analyst estimates.

Is Squarespace buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Squarespace's revenue to grow 13.9% year on year to $204.7 million, slowing down from the 31.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.11 per share.

Squarespace Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time since going public on average by 2.04%.

Looking at Squarespace's peers in the sales and marketing software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. GoDaddy delivered top-line growth of 11.2% year on year, beating analyst estimates by 1.36% and BigCommerce reported revenues up 41.5% year on year, exceeding estimates by 3.46%. GoDaddy traded up 1.91% on the results, and BigCommerce was up 1.11%. Read our full analysis of GoDaddy's results here and BigCommerce's results here.

Tech stocks have been facing declining investor sentiment in 2022 and software stocks have been swept alongside with it, with share price down on average 24.4% over the last month. Squarespace is down 34.6% during the same time, and is heading into the earnings with analyst price target of $33, compared to share price of $16.49.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.