UPDATE: JMP Securities Starts Squarespace (SQSP) at Market Outperform
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JMP Securities analyst Ronald Josey initiates coverage on Squarespace (NYSE: SQSP) with a Market Outperform rating and a price target of $75.00.
The analyst comments "Our five key investment themes: 1) A focus on design—design is at the heart of SQSP's all-in-one platform (see our website-building process in the note); 2) Commerce is a long-term tailwind—1Q21 GMV reached a $4.8B run-rate (1Q GMV +100% Y/Y) and we believe accounts for ~10% of subs with significant upsell & cross-sell opportunities across transactions, scheduling, and hospitality; 3) Cohorts are increasingly predictable—with 85.6% cash retention rates, Squarespace’s subscribers are increasingly sticky as they adopt higher-priced plans; 4) International now in execution phase—representing ~30% of revenues, tech infrastructure buildout is now complete and the focus turns to execution; and 5) Investing for growth, preserving profitability—with ~85% gross margins and 25% unlevered FCF in '20, SQSP has optionality on investing & M&A."
Shares of Squarespace closed at $59.90 yesterday.
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