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WIX Stock Up on Stake Acquisition Announcement by Starboard

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Recently activist-investor fund Starboard announced acquisition of a sizeable stake in Wix.com Ltd (WIX - Free Report) through a filing with the Securities and Exchange Commission ("SEC").

According to the SEC filing, Starboard noted that shares when “purchased, were undervalued and represented an attractive investment opportunity". The activist-investor fund has bought almost 9% stake in the company.

Following the announcement, the shares gained 15.7% and closed trading at $85.26 on Sep 19, 2022. However, in the past year, shares have had a dismal run on the trading front, declining 58.9% compared with the Zack sub-industry’s fall of 41.4%.

Zacks Investment Research
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Headquartered in Tel Aviv, Israel, Wix is a cloud-based web development platform. The company offers solutions that enable businesses, organizations, professionals and individuals to develop customized websites and application platforms. The company’s core products and services include Wix Editor, Wix ADI, Corvid by Wix (now Velo by Wix), Wix Mobile, Web, Wix App and Wix SEO Wi.

The company is benefiting from the launch of several user-friendly applications and strategic collaborations. Recently, Wix announced its new Wix Portfolio, which enables professional users and students to customize and develop an online portfolio to showcase and grow their business. Wix Portfolio enables its customers to concentrate more on their vision instead of the web designing process

In July 2022, the company unveiled new Wix Editor, which integrates with the Wix Artificial Design Intelligence and the existing Wix Editor to provide users with simplified complex design capabilities. Customers can now leverage the improved design possibilities to turn their web creation visions into realities.

Synergies from acquisitions of Modalyst, Rise, ai and SpeedETab are also acting as a tailwind.

However, the Ukraine war, forex volatility and weakness in global macroeconomic conditions are denting the company’s performance. Higher product development and marketing investments amid increasing competition are added concerns.

Focus on small and medium-sized businesses that have been hit hard by the pandemic is an added concern for this Zacks Rank #3 (Hold) stock.

Stocks to Consider

Some better-ranked stocks from the broader technology space are Cadence Design Systems (CDNS - Free Report) , Keysight Technologies (KEYS - Free Report) and Arista Networks (ANET - Free Report) . Keysight and Arista sport a Zacks Rank #1 (Strong Buy) while Cadence carries a Zacks Rank #2 (Buy). You     can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.

Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS have moved up 3.9% in the past year.

The Zacks Consensus Estimate for Keysight’s fiscal 2022 earnings is pegged at $7.47 per share, up 4.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 11%.

Keysight’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, the average being 9.3%. Shares of KEYS have lost 4.7% of their value in the past year.

The Zacks Consensus Estimate for Arista Network’s 2022 earnings is pegged at $4.04 per share, increasing 10.1% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.

Arista Network’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 30.8% in the past year.

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