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Why Is Wix.com (WIX) Down 12.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for Wix.com (WIX - Free Report) . Shares have lost about 12.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Wix.com due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Wix's Q2 Loss Narrower Than Expected, Revenues Increase Y/Y
Wix reported a non-GAAP loss of 14 cents per share in second-quarter 2022, narrower than the Zacks Consensus Estimate loss of 39 cents per share. The company reported a loss of 28 cents per share in the previous-year quarter.
Total revenues increased 9% year over year to $345.2 million and beat the consensus mark of $343.8 million. On a constant-currency basis, total revenues were $349 million, up 11% year over year. As of Jun 30, 2022, registered users were 234 million.
Quarter in Detail
Creative Subscriptions revenues (74.8% of revenues) increased 9% year over year to $258.2 million. Business Solutions revenues (25.2% of revenues) rose 9% to $87 million.
In the second quarter, Creative Subscriptions Annualized Recurring Revenues were $1.05 billion, up 9% year over year.
Bookings were $354.6 million, up 3% year over year. Creative Subscriptions’ bookings increased 3% year over year to $269.9 million. Business Solutions’ bookings rose 6% to $84.7 million.
Region-wise, North America, Europe, Asia and others; and Latin America contributed 58%, 26%, 12% and 4% to second-quarter revenues, respectively.Revenues from North America, Europe, Asia and others; and Latin America increased 12%, 10%, 10% and 2% year over year, respectively.
Operating Details
Non-GAAP gross margin contracted 100 basis points (bps) to 62%
Non-GAAP research and development expenses, as a percentage of revenues were 26% and remained flat compared with the previous-year quarter. Non-GAAP selling and marketing expenses were 32%, contracting 400 bps year over year.
Wix reported a non-GAAP operating loss of $12.9 million compared with a non-GAAP operating loss of $17.8 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2022, Wix's cash and cash equivalents stood at $1.5 billion.
As of Jun 30, 2022, long-term debt was reported at $565 million compared with $924 million as of Mar 31, 2022.
Cash flow used from operations amounted to $2.7 million in the second quarter compared with cash flow from the operation of $13.7 million in the previous quarter.
Capital expenditures totaled $13.2 million in the reported quarter. Free cash outflow was $15.9 million.
Guidance
For third-quarter 2022, revenues are expected between $341 million and $345 million, suggesting 7-8% growth from the prior-year quarter's reported figure. The Zacks Consensus Estimate for the same is pegged at $356.58 million.
The company expects 2022 revenues to grow at 8% to 10% year over year.
The company expects free cash flow to be 2% to 3% of revenues in 2022
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 21.18% due to these changes.
VGM Scores
At this time, Wix.com has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Wix.com has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Wix.com is part of the Zacks Computers - IT Services industry. Over the past month, DXC Technology Company. (DXC - Free Report) , a stock from the same industry, has gained 1.1%. The company reported its results for the quarter ended June 2022 more than a month ago.
DXC Technology Company. reported revenues of $3.71 billion in the last reported quarter, representing a year-over-year change of -10.5%. EPS of $0.75 for the same period compares with $0.84 a year ago.
DXC Technology Company. is expected to post earnings of $0.73 per share for the current quarter, representing a year-over-year change of -18.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.7%.
DXC Technology Company. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Why Is Wix.com (WIX) Down 12.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Wix.com (WIX - Free Report) . Shares have lost about 12.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Wix.com due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Wix's Q2 Loss Narrower Than Expected, Revenues Increase Y/Y
Wix reported a non-GAAP loss of 14 cents per share in second-quarter 2022, narrower than the Zacks Consensus Estimate loss of 39 cents per share. The company reported a loss of 28 cents per share in the previous-year quarter.
Total revenues increased 9% year over year to $345.2 million and beat the consensus mark of $343.8 million. On a constant-currency basis, total revenues were $349 million, up 11% year over year. As of Jun 30, 2022, registered users were 234 million.
Quarter in Detail
Creative Subscriptions revenues (74.8% of revenues) increased 9% year over year to $258.2 million. Business Solutions revenues (25.2% of revenues) rose 9% to $87 million.
In the second quarter, Creative Subscriptions Annualized Recurring Revenues were $1.05 billion, up 9% year over year.
Bookings were $354.6 million, up 3% year over year. Creative Subscriptions’ bookings increased 3% year over year to $269.9 million. Business Solutions’ bookings rose 6% to $84.7 million.
Region-wise, North America, Europe, Asia and others; and Latin America contributed 58%, 26%, 12% and 4% to second-quarter revenues, respectively.Revenues from North America, Europe, Asia and others; and Latin America increased 12%, 10%, 10% and 2% year over year, respectively.
Operating Details
Non-GAAP gross margin contracted 100 basis points (bps) to 62%
Non-GAAP research and development expenses, as a percentage of revenues were 26% and remained flat compared with the previous-year quarter. Non-GAAP selling and marketing expenses were 32%, contracting 400 bps year over year.
Wix reported a non-GAAP operating loss of $12.9 million compared with a non-GAAP operating loss of $17.8 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2022, Wix's cash and cash equivalents stood at $1.5 billion.
As of Jun 30, 2022, long-term debt was reported at $565 million compared with $924 million as of Mar 31, 2022.
Cash flow used from operations amounted to $2.7 million in the second quarter compared with cash flow from the operation of $13.7 million in the previous quarter.
Capital expenditures totaled $13.2 million in the reported quarter. Free cash outflow was $15.9 million.
Guidance
For third-quarter 2022, revenues are expected between $341 million and $345 million, suggesting 7-8% growth from the prior-year quarter's reported figure. The Zacks Consensus Estimate for the same is pegged at $356.58 million.
The company expects 2022 revenues to grow at 8% to 10% year over year.
The company expects free cash flow to be 2% to 3% of revenues in 2022
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 21.18% due to these changes.
VGM Scores
At this time, Wix.com has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Wix.com has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Wix.com is part of the Zacks Computers - IT Services industry. Over the past month, DXC Technology Company. (DXC - Free Report) , a stock from the same industry, has gained 1.1%. The company reported its results for the quarter ended June 2022 more than a month ago.
DXC Technology Company. reported revenues of $3.71 billion in the last reported quarter, representing a year-over-year change of -10.5%. EPS of $0.75 for the same period compares with $0.84 a year ago.
DXC Technology Company. is expected to post earnings of $0.73 per share for the current quarter, representing a year-over-year change of -18.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.7%.
DXC Technology Company. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.