Squarespace (SQSP) Stock Falls Amid Market Uptick: What Investors Need to Know

Squarespace (SQSP) closed at $34.25 in the latest trading session, marking a -0.84% move from the prior day. This change lagged the S&P 500's 0.89% gain on the day. At the same time, the Dow added 1.03%, and the tech-heavy Nasdaq gained 1.25%.

Heading into today, shares of the a software company had gained 10.53% over the past month, outpacing the Computer and Technology sector's gain of 3.77% and the S&P 500's gain of 3.56% in that time.

Market participants will be closely following the financial results of Squarespace in its upcoming release. Meanwhile, the latest consensus estimate predicts the revenue to be $276.38 million, indicating a 16.6% increase compared to the same quarter of the previous year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.52 per share and revenue of $1.18 billion. These totals would mark changes of +1140% and +16.71%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Squarespace. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 14.1% higher. Squarespace presently features a Zacks Rank of #3 (Hold).

In the context of valuation, Squarespace is at present trading with a Forward P/E ratio of 66.68. This denotes a premium relative to the industry's average Forward P/E of 24.58.

One should further note that SQSP currently holds a PEG ratio of 3.29. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software and Services was holding an average PEG ratio of 1.68 at yesterday's closing price.

The Internet - Software and Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 50, finds itself in the top 20% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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