Citi upgraded Squarespace (NYSE:SQSP) to Buy from Neutral and raised its price target to $40.00 from $30.00, driven by an improved growth outlook.

The upgrade is supported by strong Q4/22 results and fiscal 2023 guidance, along with macro trends favoring new business formations and domain growth year-to-date.

Additionally, positive feedback from Citi’s Web Builders Survey suggests the company’s competitive edge, while multiple fundamental drivers (such as payment rollout and improved pricing and packaging) and structurally higher margins underpin their positive outlook.

According to Citi, this improvement is likely to continue beyond 2024, leading to upside pressure on estimates.