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Squarespace Rises on Mizuho's Initiation at Buy and $80 Price Target

Squarespace offers a 'robust' software-as-a-service platform to build websites, a Mizuho Securities analyst says.

Squarespace  (SQSP) - Get SQUARESPACE, INC. Report was climbing Wednesday after a Mizuho Securities analyst initiated coverage of the web-hosting service with a buy rating and an $80 price target.

Shares of the New York company were rising 3.7% to $59.96 on Wednesday.

Analyst Siti Panigrahi said in a research note that Squarespace offers a "robust" software-as-a-service platform to build websites and is "differentiated through aesthetic appeal, ease of use, and features to garner market share in the digital goods and services marketplace."

The analyst sees Squarespace as a "compelling investment with a valuation that does not yet reflect its promising fundamentals."

Panigrahi sees strong revenue growth and said that the company’s gross margins are more attractive than peers, according to Bloomberg. He said company’s valuation “does not yet reflect its promising fundamentals.”

Several analysts initiated coverage of Squarespace on Monday, including Raymond James analyst Aaron Kessler, who started the company with an outperform rating and $70 price target. 

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Squarespace is well positioned to benefit from "several key industry trends," including increasing adoption of online presence solutions, growth of online commerce, and an increasing desire among small- to mid-sized businesses for direct-to-consumer relationships, Kessler said, according to the Fly.

J.P. Morgan analyst Sterling Auty initiated coverage of Squarespace with an overweight rating and $70 price target. 

The analyst said he saw a "distinct tailwind" for companies like Squarespace to grow given an improving economy on the back of increased vaccinations that will help alleviate small business closure.

Squarespace went public as a direct listing with a $50 reference price last month. The company filed to go public in April.

Direct listings are an alternative to traditional initial public offerings, and a number of prominent technology companies have chosen to go public this way.

The cryptocurrency exchange Coinbase Global  (COIN) chose a direct listing.

Square's backers include General Atlantic, Index Ventures and Accel. Its top competitors include Wix.com  (WIX) - Get Wix.com Ltd. Report and GoDaddy  (GDDY) - Get GoDaddy, Inc. Class A Report.