Yahoo Finance Analysts Expect Squarespace, Inc. (NYSE:SQSP) To Breakeven Soon
Squarespace, Inc. (NYSE:SQSP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Squarespace, Inc. operates platform for businesses and independent creators to build online presence, grow their brands, and manage their businesses across the internet in the United States and internationally. The US$5.1b market-cap company posted a loss in its most recent financial year of US$7.1m and a latest trailing-twelve-month loss of US$7.4m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Squarespace will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Squarespace
Consensus from 17 of the American IT analysts is that Squarespace is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$57m in 2024. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 41%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Squarespace's upcoming projects, however, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Squarespace currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
There are too many aspects of Squarespace to cover in one brief article, but the key fundamentals for the company can all be found in one place – Squarespace's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:
Valuation: What is Squarespace worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Squarespace is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Squarespace’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
