It’s no secret that Squarespace (NYSE:SQSP) has had a rough time on the stock market since going public in 2015. The company’s shares are down more than 60% from their IPO price, and they’ve shown no signs of recovery.
So what’s the deal Why is Squarespace stock so low
There are a few factors that have contributed to Squarespace’s poor performance on the stock market. First, the company has been slow to turn a profit.
It reported its first quarterly profit in Q4 of 2017, but it has yet to show sustained profitability. This is a major concern for investors, as it indicates that Squarespace may not be a viable long-term business.
Second, Squarespace has been slow to grow its revenue. In 2016, the company’s revenue grew by just 20%.
First, the company’s revenue growth has been slowing down. In the first quarter of 2019, Squarespace’s revenue was $72.4 million, which was up just 13% from the previous year. This is a marked slowdown from previous years, when the company was growing at a rate of over 50%.
Second, Squarespace has been losing money. In 2018, the company reported a net loss of $76.5 million, and in the first quarter of 2019, it lost $17.9 million. This is a concern for investors because it suggests that Squarespace may not be able to generate enough profit to justify its current stock price.
Third, competition in the website builder market is increasing. Squarespace competes with well-established companies such as Wix and Weebly, as
This is much slower than the growth rates of its competitors, such as Shopify (NYSE:SHOP), which grew by 97% in 2016. This slower growth rate indicates that Squarespace may not be able to keep up with its competition in the long run.
Third, Squarespace has been investing heavily in marketing and expansion, which has led to high costs and increased losses. In 2016, the company’s operating losses more than doubled to $76 million. This is a major concern for investors, as it indicates that Squarespace is not yet profitable enough to justify its high costs.
Fourth,Squarespace’s shares are overvalued relative to its financials. The company’s shares are currently trading at around $12, which is more than 50% higher than its IPO price of $8 per share.
However, when we compare Squarespace’s valuation to its competitors’, we can see that it is actually quite undervalued. For example, Shopify is currently trading at around $70 per share, which is nearly 9 times its IPO price. This indicates that investors believe that Shopify has much more upside potential than Squarespace.
So why is Squarespace stock so low There are a few factors that have contributed to the company’s poor performance on the stock market. First,Squarespace has been slow to turn a profit.
Second,Squarespace has been slow to grow its revenue. Third,Squarespace has been investing heavily in marketing and expansion, which has led to high costs and increased losses. Fourth,Squarespace’s shares are overvalued relative to its financials.
