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Squarespace (SQSP) Moves 8.6% Higher: Will This Strength Last?

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Squarespace SQSP shares soared 8.6% in the last trading session to close at $21.10. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.3% loss over the past four weeks.

Squarespace is benefiting from expanding customer base and rising subscription revenues.

This a software company is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of +101.6%. Revenues are expected to be $211.88 million, up 8.1% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Squarespace, the consensus EPS estimate for the quarter has been revised 13.8% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on SQSP going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Squarespace belongs to the Zacks Internet - Software and Services industry. Another stock from the same industry, Donnelley Financial Solutions DFIN, closed the last trading session 2.8% higher at $27.50. Over the past month, DFIN has returned -6.4%.

For Donnelley Financial , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.98. This represents a change of -29% from what the company reported a year ago. Donnelley Financial currently has a Zacks Rank of #5 (Strong Sell).


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