Investors in Squarespace (NYSE:SQSP) from a year ago are still down 53%, even after 41% gain this past week

Squarespace, Inc. (NYSE:SQSP) shareholders are doubtless heartened to see the share price bounce 41% in just one week. But that's not enough to compensate for the decline over the last twelve months. Like an arid lake in a warming world, shareholder value has evaporated, with the share price down 53% in that time. So the bounce should be viewed in that context. Arguably, the fall was overdone.

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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Squarespace saw its revenue grow by 22%. We think that is pretty nice growth. Unfortunately it seems investors wanted more, because the share price is down 53% in that time. It may well be that the business remains approximately on track, but its revenue growth has simply been delayed. To our minds it isn't enough to just look at revenue, anyway. Always consider when profits will flow.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Squarespace is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Squarespace in this interactive graph of future profit estimates.

A Different Perspective

We doubt Squarespace shareholders are happy with the loss of 53% over twelve months. That falls short of the market, which lost 10%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 22%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. Case in point: We've spotted 3 warning signs for Squarespace you should be aware of, and 1 of them is a bit concerning.

But note: Squarespace may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.