Squarespace, Inc. (SQSP) | Investment Case

1. Company Snapshot

1.a. Company Description

Squarespace, Inc.operates platform for businesses and independent creators to build online presence, grow their brands, and manage their businesses across the internet.Its suite of integrated products enables users to manage their projects and businesses through websites, domains, e-commerce, marketing tools, and scheduling, as well as tools for managing a social media presence.

It serves small and medium-sized businesses, and independent creators, such as restaurants, photographers, wedding planners, artists, musicians, and bloggers.Squarespace, Inc.was founded in 2003 and is headquartered in New York, New York.

Show Full description

1.b. Last Insights on SQSP

Positive drivers behind Squarespace's recent developments include its Q2 earnings release, which showed revenue growth despite missing EPS estimates. The company's upgrade to a "Buy" rating, as reported by some analysts, reflects growing optimism about its earnings prospects. Additionally, the proposed sale of the company to private equity firm Permira is being investigated by law firms, which may indicate a potential premium for shareholders.

1.c. Company Highlights

Last Price	46.57
Change Percentage	-0.21%
Open	46.65
Previous Close	46.67
Market Cap ( Millions)	6470
Volume	2360980
Year High	46.69
Year Low	26.7
M A 50	45.76
M A 200	39.94

FCF Yield	3.31%
Dividend Yield	0.00%
ROE	2.51%
Debt / Equity	-260.86%
Net Debt / EBIDTA	293.75%
Price To Book	-24.24
Price Earnings Ratio	-891.36
Price To FCF	30.22
Price To sales	6.39
EV / EBITDA	52.32

2. Transcript Summary

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3. NewsRoom

Evolving Squarespace for Pros: A New Era for Creative Professionals

Sep -18

Source: prnewswire.com

Best AI Website Builder (May 2025): Squarespace Awarded Top AI Site Creator by SoftwareExperts.org

May -16

Source: globenewswire.com

Permira Completes Acquisition of Squarespace

Oct -17

Source: businesswire.com

CORRECTING and REPLACING Permira Completes Tender Offer for Outstanding Shares of Squarespace

Oct -14

Source: businesswire.com

Permira Completes Tender Offer for Outstanding Shares of Squarespace

Oct -14

Source: businesswire.com

Squarespace Refresh 2024: Introducing a New Era for Entrepreneurs

Sep -24

Source: prnewswire.com

SHAREHOLDER NOTICE: Brodsky & Smith Announces an Investigation of Squarespace, Inc. (SQSP)

Sep -17

Source: https://feeds.newsfilecorp.com

SQSP Merger Update: Johnson Fistel Continues to Investigate Squarespace and its Directors and Management Following Criticism of the Deal Valuation

Sep -16

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.61%)

6. Segments

Presence

Expected Growth: 12.0%

Squarespace's Presence segment growth of 12.0% is driven by increasing adoption of its website and online presence solutions among small and medium-sized businesses, fueled by the rising demand for digital transformation and e-commerce enablement. Additionally, the company's strategic partnerships, innovative product offerings, and expanding global footprint contribute to its growth momentum.

Commerce

Expected Growth: 14.0%

Squarespace's Commerce segment growth of 14.0% is driven by increasing adoption of e-commerce platforms, rising demand for online presence among small and medium-sized businesses, and the company's continued innovation in website design and development tools, as well as strategic partnerships and expanding global reach.

7. Detailed Products

Website Builder

A drag-and-drop website builder that allows users to create custom websites without coding

E-commerce Platform

A comprehensive e-commerce solution that enables users to create online stores and sell products directly to customers

Domain Registration

A domain registration service that allows users to register and manage custom domain names

Web Hosting

A reliable web hosting service that provides fast and secure hosting for websites

Online Scheduling

A scheduling tool that allows users to schedule appointments and bookings online

Email Marketing

An email marketing tool that enables users to create and send targeted email campaigns

Analytics and Insights

A built-in analytics tool that provides insights into website traffic, engagement, and conversion rates

8. Squarespace, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Squarespace's website building and hosting services are highly specialized, making it difficult for customers to find substitutes. However, the presence of open-source alternatives like WordPress and Joomla reduces the switching costs, making it a medium threat.

Bargaining Power Of Customers

Squarespace's customers are mostly small businesses and individuals, who have limited bargaining power. The company's subscription-based model and lack of dependence on a few large customers further reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Squarespace's suppliers are primarily cloud infrastructure providers like Amazon Web Services and Google Cloud Platform. The company's ability to switch between suppliers and the presence of multiple suppliers reduce the bargaining power of suppliers.

Threat Of New Entrants

The website building and hosting industry is highly competitive, and new entrants can easily enter the market. The low barriers to entry, coupled with the presence of open-source alternatives, make it a high threat.

Intensity Of Rivalry

The website building and hosting industry is highly competitive, with established players like Wix, Weebly, and WordPress. The high intensity of rivalry is driven by the presence of multiple players, low switching costs, and the need for continuous innovation.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	181.09%
Debt Cost	3.95%
Equity Weight	-81.09%
Equity Cost	6.52%
WACC	1.86%
Leverage	-223.33%

11. Quality Control: Squarespace, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Dropbox

A-Score: 6.1/10

Value: 5.9

Growth: 7.9

Quality: 7.4

Yield: 0.0

Momentum: 7.5

Volatility: 7.7

1-Year Total Return ->

Nutanix

A-Score: 5.0/10

Value: 2.8

Growth: 8.3

Quality: 6.1

Yield: 0.0

Momentum: 7.5

Volatility: 5.3

1-Year Total Return ->

Okta

A-Score: 5.0/10

Value: 2.1

Growth: 9.1

Quality: 6.7

Yield: 0.0

Momentum: 7.5

Volatility: 4.3

1-Year Total Return ->

WEX

A-Score: 4.6/10

Value: 5.7

Growth: 6.9

Quality: 6.8

Yield: 0.0

Momentum: 2.0

Volatility: 6.0

1-Year Total Return ->

Squarespace

A-Score: 3.9/10

Value: 4.5

Growth: 5.3

Quality: 5.6

Yield: 0.0

Momentum: 5.0

Volatility: 2.7

1-Year Total Return ->

Akamai

A-Score: 3.8/10

Value: 4.0

Growth: 5.6

Quality: 5.0

Yield: 0.0

Momentum: 1.5

Volatility: 7.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-10.43%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

1.86%

Squarespace, Inc. - US85225A1079

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SQSP

1.c. Company Highlights

Strong Momentum

Average Yield

Medium Volatility

Earnings Beats

Revenues Beats

Earnings Miss

Fairly Valued

Revenues Miss

Less Volatile

Stable Momentum

Average Quality

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.61%)

6. Segments

Presence

Expected Growth: 12.0%

Commerce

Expected Growth: 14.0%

7. Detailed Products

Website Builder

E-commerce Platform

Domain Registration

Web Hosting

Online Scheduling

Email Marketing

Analytics and Insights

8. Squarespace, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Squarespace, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

46.57$

Current Price

46.57$

Potential

0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA