SQUARESPACE INC - CLASS A (SQSP) Stock Fundamental Analysis
NYSE:SQSP - New York Stock Exchange, Inc. - US85225A1079 - Common Stock - Currency: USD
Taking everything into account, SQSP scores 3 out of 10 in our fundamental rating. SQSP was compared to 82 industry peers in the IT Services industry. Both the profitability and financial health of SQSP have multiple concerns. SQSP is valied quite expensively at the moment, while it does show a decent growth rate.
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.
In the past 5 years SQSP always reported negative net income.
In the past 5 years SQSP always reported a positive cash flow from operatings.
1.2 Ratios
SQSP has a Return On Assets (-0.50%) which is in line with its industry peers.
SQSP has a Return On Invested Capital of 9.88%. This is in the better half of the industry: SQSP outperforms 75.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.5% | ||
| ROE | N/A | ||
| ROIC | 9.88% |
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
Looking at the Operating Margin, with a value of 4.68%, SQSP is in line with its industry, outperforming 56.79% of the companies in the same industry.
SQSP's Operating Margin has declined in the last couple of years.
The Gross Margin of SQSP (74.21%) is better than 91.36% of its industry peers.
SQSP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.68% | ||
| PM (TTM) | N/A | ||
| GM | 74.21% |
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%
2. Health
2.1 Basic Checks
SQSP has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, SQSP has more shares outstanding
The debt/assets ratio for SQSP has been reduced compared to a year ago.
2.2 Solvency
SQSP has an Altman-Z score of 2.57. 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 has a Altman-Z score (2.57) which is comparable to the rest of the industry.
The Debt to FCF ratio of SQSP is 2.61, which is a good value as it means it would take SQSP, 2.61 years of fcf income to pay off all of its debts.
SQSP's Debt to FCF ratio of 2.61 is fine compared to the rest of the industry. SQSP outperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.61 | ||
| Altman-Z | 2.57 |
ROIC/WACC1
WACC9.93%
2.3 Liquidity
A Current Ratio of 0.76 indicates that SQSP may have some problems paying its short term obligations.
SQSP has a Current ratio of 0.76. This is amonst the worse of the industry: SQSP underperforms 83.95% of its industry peers.
SQSP has a Quick Ratio of 0.76. This is a bad value and indicates that SQSP is not financially healthy enough and could expect problems in meeting its short term obligations.
SQSP has a worse Quick ratio (0.76) than 83.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.76 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 97.53% over the past year.
Looking at the last year, SQSP shows a quite strong growth in Revenue. The Revenue has grown by 18.77% in the last year.
The Revenue has been growing by 21.02% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)97.53%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%33.33%
Revenue 1Y (TTM)18.77%
Revenue growth 3Y17.68%
Revenue growth 5Y21.02%
Sales Q2Q%19.89%
3.2 Future
Based on estimates for the next years, SQSP will show a very strong growth in Earnings Per Share. The EPS will grow by 115.31% on average per year.
SQSP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.77% yearly.
EPS Next Y732.4%
EPS Next 2Y261.81%
EPS Next 3Y177.11%
EPS Next 5Y115.31%
Revenue Next Year20.35%
Revenue Next 2Y17.46%
Revenue Next 3Y15.64%
Revenue Next 5Y14.77%
3.3 Evolution
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
SQSP reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
Based on the Price/Forward Earnings ratio of 83.98, the valuation of SQSP can be described as expensive.
SQSP's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 36.36. SQSP is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 83.98 |
4.2 Price Multiples
SQSP's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. SQSP is more expensive than 62.96% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SQSP is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.87 | ||
| EV/EBITDA | 56.06 |
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 177.10% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y261.81%
EPS Next 3Y177.11%
5. Dividend
5.1 Amount
SQSP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
46.57
-0.1 (-0.21%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners47.24%
Inst Owner Change-29.75%
Ins Owners7.17%
Ins Owner Change0%
Market Cap6.45B
Analysts71.11
Price Target46.32 (-0.54%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)18.28%
Min EPS beat(2)-63.44%
Max EPS beat(2)100%
EPS beat(4)1
Avg EPS beat(4)-56.87%
Min EPS beat(4)-191.2%
Max EPS beat(4)100%
EPS beat(8)2
Avg EPS beat(8)-212.48%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-0.5%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)-0.25%
Revenue beat(4)2
Avg Revenue beat(4)-0.08%
Min Revenue beat(4)-0.75%
Max Revenue beat(4)0.65%
Revenue beat(8)3
Avg Revenue beat(8)-0.12%
Revenue beat(12)3
Avg Revenue beat(12)-0.36%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)1.54%
PT rev (3m)2.74%
EPS NQ rev (1m)41.48%
EPS NQ rev (3m)-14.76%
EPS NY rev (1m)0%
EPS NY rev (3m)-19.58%
Revenue NQ rev (1m)-0.12%
Revenue NQ rev (3m)0.52%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 83.98 | ||
| P/S | 5.83 | ||
| P/FCF | 30.87 | ||
| P/OCF | 28.69 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 56.06 |
EPS(TTM)-0.04
EYN/A
EPS(NY)0.55
Fwd EY1.19%
FCF(TTM)1.51
FCFY3.24%
OCF(TTM)1.62
OCFY3.49%
SpS7.98
BVpS-1.75
TBVpS-4.19
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.5% | ||
| ROE | N/A | ||
| ROCE | 12.51% | ||
| ROIC | 9.88% | ||
| ROICexc | 44.8% | ||
| ROICexgc | N/A | ||
| OM | 4.68% | ||
| PM (TTM) | N/A | ||
| GM | 74.21% | ||
| FCFM | 18.89% |
ROA(3y)-21.03%
ROA(5y)-44.47%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
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%
F-Score5
Asset Turnover1.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.61 | ||
| Debt/EBITDA | 4.13 | ||
| Cap/Depr | 23.94% | ||
| Cap/Sales | 1.44% | ||
| Interest Coverage | 1.32 | ||
| Cash Conversion | 190.39% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.76 | ||
| Quick Ratio | 0.76 | ||
| Altman-Z | 2.57 |
F-Score5
WACC9.93%
ROIC/WACC1
Cap/Depr(3y)36.24%
Cap/Depr(5y)35.04%
Cap/Sales(3y)1.47%
Cap/Sales(5y)1.37%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)97.53%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%33.33%
EPS Next Y732.4%
EPS Next 2Y261.81%
EPS Next 3Y177.11%
EPS Next 5Y115.31%
Revenue 1Y (TTM)18.77%
Revenue growth 3Y17.68%
Revenue growth 5Y21.02%
Sales Q2Q%19.89%
Revenue Next Year20.35%
Revenue Next 2Y17.46%
Revenue Next 3Y15.64%
Revenue Next 5Y14.77%
EBIT growth 1Y-35.06%
EBIT growth 3Y27.71%
EBIT growth 5Y8.85%
EBIT Next Year171.84%
EBIT Next 3Y62.45%
EBIT Next 5Y41.74%
FCF growth 1Y56.14%
FCF growth 3Y13.8%
FCF growth 5YN/A
OCF growth 1Y51.78%
OCF growth 3Y15.5%
OCF growth 5YN/A