SQUARESPACE INC - CLASS A (SQSP)

US85225A1079 - Common Stock

43.25  +0.1 (+0.23%)

After market: 43.25 0 (0%)

Fundamental Rating

4

Taking everything into account, SQSP scores 4 out of 10 in our fundamental rating. SQSP was compared to 86 industry peers in the IT Services industry. While SQSP is still in line with the averages on profitability rating, there are concerns on its financial health. SQSP has a correct valuation and a medium growth rate.



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4

1. Profitability

1.1 Basic Checks

SQSP had negative earnings in the past year.
In the past year SQSP had a positive cash flow from operations.
SQSP had negative earnings in each of the past 5 years.
SQSP had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of -0.77%, SQSP is in line with its industry, outperforming 50.00% of the companies in the same industry.
SQSP has a Return On Invested Capital of 15.29%. This is amongst the best in the industry. SQSP outperforms 89.29% of its industry peers.
Industry RankSector Rank
ROA -0.77%
ROE N/A
ROIC 15.29%
ROA(3y)-21.03%
ROA(5y)-44.47%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A

1.3 Margins

SQSP has a Operating Margin of 6.38%. This is in the better half of the industry: SQSP outperforms 63.10% of its industry peers.
SQSP's Operating Margin has declined in the last couple of years.
SQSP's Gross Margin of 76.78% is amongst the best of the industry. SQSP outperforms 94.05% of its industry peers.
SQSP's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 6.38%
PM (TTM) N/A
GM 76.78%
OM growth 3Y8.52%
OM growth 5Y-10.06%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-1.89%
GM growth 5Y-0.62%

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3

2. Health

2.1 Basic Checks

SQSP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
SQSP has more shares outstanding than it did 1 year ago.
SQSP has a better debt/assets ratio than last year.

2.2 Solvency

SQSP has an Altman-Z score of 2.27. This is not the best score and indicates that SQSP is in the grey zone with still only limited risk for bankruptcy at the moment.
SQSP's Altman-Z score of 2.27 is in line compared to the rest of the industry. SQSP outperforms 51.19% of its industry peers.
SQSP has a debt to FCF ratio of 2.37. This is a good value and a sign of high solvency as SQSP would need 2.37 years to pay back of all of its debts.
The Debt to FCF ratio of SQSP (2.37) is better than 67.86% of its industry peers.
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 2.37
Altman-Z 2.27
ROIC/WACC1.46
WACC10.49%

2.3 Liquidity

A Current Ratio of 0.70 indicates that SQSP may have some problems paying its short term obligations.
SQSP has a worse Current ratio (0.70) than 86.90% of its industry peers.
A Quick Ratio of 0.70 indicates that SQSP may have some problems paying its short term obligations.
SQSP has a Quick ratio of 0.70. This is amonst the worse of the industry: SQSP underperforms 86.90% of its industry peers.
Industry RankSector Rank
Current Ratio 0.7
Quick Ratio 0.7

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6

3. Growth

3.1 Past

SQSP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 95.83%, which is quite impressive.
The Revenue has grown by 17.88% in the past year. This is quite good.
The Revenue has been growing by 21.02% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)95.83%
EPS 3YN/A
EPS 5YN/A
EPS growth Q2QN/A
Revenue 1Y (TTM)17.88%
Revenue growth 3Y17.68%
Revenue growth 5Y21.02%
Revenue growth Q2Q18.63%

3.2 Future

The Earnings Per Share is expected to grow by 170.11% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 14.34% on average over the next years. This is quite good.
EPS Next Y892.78%
EPS Next 2Y287.43%
EPS Next 3Y170.11%
EPS Next 5YN/A
Revenue Next Year17.53%
Revenue Next 2Y15.92%
Revenue Next 3Y14.34%
Revenue Next 5Y14.34%

3.3 Evolution

The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings Ratio is negative for SQSP. In the last year negative earnings were reported.
The Price/Forward Earnings ratio is 66.48, which means the current valuation is very expensive for SQSP.
The rest of the industry has a similar Price/Forward Earnings ratio as SQSP.
SQSP is valuated expensively when we compare the Price/Forward Earnings ratio to 20.47, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE N/A
Fwd PE 66.48

4.2 Price Multiples

SQSP's Enterprise Value to EBITDA ratio is in line with the industry average.
61.90% of the companies in the same industry are more expensive than SQSP, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 25.31
EV/EBITDA 50.09

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SQSP's earnings are expected to grow with 170.11% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y287.43%
EPS Next 3Y170.11%

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0

5. Dividend

5.1 Amount

SQSP does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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SQUARESPACE INC - CLASS A

NYSE:SQSP (5/16/2024, 7:18:36 PM)

After market: 43.25 0 (0%)

43.25

+0.1 (+0.23%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap5.94B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield N/A
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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EPS beat(8)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE N/A
Fwd PE 66.48
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -0.77%
ROE N/A
ROCE
ROIC
ROICexc
ROICexgc
OM 6.38%
PM (TTM) N/A
GM 76.78%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.09
Health
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 0.7
Quick Ratio 0.7
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)95.83%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y892.78%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)17.88%
Revenue growth 3Y17.68%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y