What Happened:
Shares of website and ecommerce tools provider Squarespace (NYSE:SQSP) jumped 8.1% in the pre-market session after the company delivered an impressive "beat and raise" quarter, with Q1 results exceeding analysts' revenue and earnings per share estimates. However, free cash flow and gross margin missed. Despite this, revenue guidance for the next quarter came in above Consensus, and the company lifted the full-year revenue outlook. Overall, it was a strong quarter for the company despite e-commerce companies reporting mixed earnings thus far. After the initial pop the shares cooled down to $29, up 4.84% from previous close.
What is the market telling us:
Squarespace's shares are a little volatile and over the last year have had 39 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. The previous big move was 14 days ago, when the company gained 5.21% on the news that analyst Ygal Arounian of Citi upgraded the stock's rating from Neutral (Hold) to Buy and raised the price target from $30 to $40.
Squarespace is up 27.3% since the beginning of the year, but at $29 per share it is still trading 11.4% below its 52-week high of $32.74 from April 2023. Investors who bought $1,000 worth of Squarespace's shares at the IPO in May 2021 would now be looking at an investment worth $664.60.
Is now the time to buy Squarespace? Access our full analysis of the earnings results here, it's free.