SQSP - Squarespace Has Revenue Growth And Margin Expansion Drivers (Rating Upgrade)

2024-03-12 17:06:52 ET

Summary

• Squarespace's Google Domains acquisition has a favorable impact on the company's future revenue, taking into account the huge potential for cross-selling.
• Price increases and new high-margin products are the key levers that SQSP can pull to improve its margins going forward.
• I raise my rating for SQSP to a Buy, considering its top-line expansion and profitability improvement drivers, and the stock's relatively lower Enterprise Value-to-Revenue multiple as compared to peers.

Elevator Pitch

Squarespace, Inc. ( SQSP ) shares are being upgraded to a Buy investment rating.

I previously wrote about SQSP's inorganic growth potential, the chances of the company becoming a takeover target, and how new business formation affects Squarespace's prospects in my October 10, 2022 write-up ....

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