BofA Cites 5 Factors For Initiating Squarespace Stock At Buy

There is upside to Squarespace Inc’s SQSP stock, given the company’s robust top-line growth, predictable revenue base, global expansion, margin expansion, upmarket initiatives and penetration of a large market opportunity, according to BofA Securities.

The Squarespace Analyst: Nat Schindler initiated coverage on Squarespace with a Buy rating and a price target of $73.

The Squarespace Thesis: The company appears poised to gain market share, with the rapid growth of penetration of internet users and e-commerce, Schindler said in the initiation note.

The analyst mentioned 5 factors for recommending Squarespace:

• A predictable business model that lends high visibility
• Expansion in the international markets
• Tailwinds from growth in e-commerce
• Upmarket initiatives to serve larger businesses
• Higher gross margins than peers, with potential for margin expansion

“We estimate a 22% average annual revenue growth over the next three years as Squarespace expands internationally and executes upmarket initiatives,” he added.

SQSP Price Action: Shares of Squarespace had risen by 3.46% to $54.08 at the time of publication Monday.