Yahoo Finance Investors in Squarespace (NYSE:SQSP) from a year ago are still down 41%, even after 4.0% gain this past week
It's easy to match the overall market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. That downside risk was realized by Squarespace, Inc. (NYSE:SQSP) shareholders over the last year, as the share price declined 41%. That falls noticeably short of the market decline of around 21%. Squarespace may have better days ahead, of course; we've only looked at a one year period.
While the last year has been tough for Squarespace shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.
Check out our latest analysis for Squarespace
Because Squarespace made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Squarespace grew its revenue by 17% over the last year. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 41%. You might even wonder if the share price was previously over-hyped. However, that's in the past now, and it's the future that matters most.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Squarespace is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Squarespace stock, you should check out this free report showing analyst consensus estimates for future profits.
A Different Perspective
We doubt Squarespace shareholders are happy with the loss of 41% over twelve months. That falls short of the market, which lost 21%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. Putting aside the last twelve months, it's good to see the share price has rebounded by 8.5%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Squarespace , and understanding them should be part of your investment process.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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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.
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