UPDATE: KeyBanc Starts Squarespace (SQSP) at Overweight
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KeyBanc analyst Josh Beck initiates coverage on Squarespace (NYSE: SQSP) with a Overweight rating and a price target of $70.00.
The analyst comments "We see the attractive TAM assessed by ~800M small business-self employed, ~$150B of spending, and ~$4T+ of e-Com GMV as a compelling market opportunity against which SQSP is generally <1% penetrated, outweighing competitive concerns against other modern web development platforms, and think SQSP is particularly well suited to address the entrepreneur segment. We view the mid-80s cash retention ratio as favorable and estimate a ~2x return on S&M between 2018 and 2020 based on our estimates for retention and incremental revenue. The combination of mid-to-high 20s revenue growth and ~20% EBITDA margin represents a compelling combination of growth and profitability."
Shares of Squarespace closed at $59.90 yesterday.
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