Healthy Upside Potential: Squarespace Inc. (SQSP)

Squarespace Inc. (NYSE: SQSP) stock fell -7.94% on Friday to $21.11 against a previous-day closing price of $22.93. With 1.74 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.53 million shares. During the session, the Software – Infrastructure company that operates in wider Technology sector, reached to the highest price of $21.60 whereas the lowest price it dropped to was $20.51. The 52-week range on SQSP shows that it touched its highest point at $34.97 and its lowest point at $14.43 during that stretch. It currently has a 1-year price target of $24.33.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SQSP was down-trending over the past week, with a drop of -4.31%, but this was up by 3.79% over a month. Three-month performance dropped to -0.05% while six-month performance rose 3.58%. The stock lost -29.11% in the past year, while it has lost -4.78% so far this year. A look at the trailing 12-month EPS for SQSP yields -0.26 with Next year EPS estimates of 0.24. For the next quarter, that number is 0.11. This implies an EPS growth rate of 3.20% for this year and 580.00% for next year.

Float and Shares Shorts:

At present, 137.83 million SQSP shares are outstanding with a float of 82.73 million shares on hand for trading. On Oct 13, 2022, short shares totaled 1.93 million, which was 1.39% higher than short shares on Sep 14, 2022. In addition to Mr. Anthony Casalena as the firm’s Founder, Pres, CEO & Chairperson of the Board, Mr. Paul Gubbay serves as its Chief Product Officer.


Institutional Ownership:

Through their ownership of 76.46% of SQSP’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 36.45% of SQSP, in contrast to 11.39% held by mutual funds. Shares owned by individuals account for 10.46%. As the largest shareholder in SQSP with 5.30% of the stake, The Vanguard Group, Inc. holds 4,713,609 shares worth 4,713,609. A second-largest stockholder of SQSP, Riverbridge Partners LLC, holds 2,322,899 shares, controlling over 2.61% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in SQSP, holding 1,978,362 shares or 2.22% stake. With a 1.52% stake in SQSP, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 1,354,064 shares are owned by the mutual fund manager. The Vanguard Small Cap Index Fund, which owns about 1.29% of SQSP stock, is the second-largest Mutual Fund holder. It holds 1,146,374 shares valued at 25.42 million. First Trust Cloud Computing ETF holds 0.93% of the stake in SQSP, owning 826,595 shares worth 18.33 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SQSP since 17 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 12 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SQSP analysts setting a high price target of $32.00 and a low target of $20.00, the average target price over the next 12 months is $24.55. Based on these targets, SQSP could surge 51.59% to reach the target high and fall by -5.26% to reach the target low. Reaching the average price target will result in a growth of 16.3% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SQSP will report FY 2022 earnings on 03/05/2024. Analysts have provided yearly estimates in a range of $0.75 being high and $0.61 being low. For SQSP, this leads to a yearly average estimate of $0.68. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Squarespace Inc. surprised analysts by $0.08 when it reported $0.24 EPS against a consensus estimate of $0.16. The surprise factor in the prior quarter was $0.29. Based on analyst estimates, the high estimate for the next quarter is $0.35 and the low estimate is $0.22. The average estimate for the next quarter is thus $0.28.

Summary of Insider Activity:

Insiders traded SQSP stock several times over the past three months with 0 Buys and 10 Sells. In these transactions, 0 shares were bought while 3,890,092 shares were sold. The number of buy transactions has increased to 13 while that of sell transactions has risen to 50 over the past year. The total number of shares bought during that period was 78,701 while 13,012,625 shares were sold.

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