Wix.com (WIX Quick QuoteWIX - Free Report) appears to be a promising stock to add to the portfolio in tackling the current macroeconomic and geopolitical uncertainties and benefit from its healthy fundamentals and growth prospects.

Let’s look at the factors that make the stock an attractive pick:

Shares Outperformed: Wall Street is facing extreme volatility due to macroeconomic factors, such as rising inflation and interest rate hikes by the Federal Reserve, increased crude oil prices and lingering supply-chain woes.

The above-mentioned factors are taking a toll on major U.S. indices. In the past year, the S&P 500 has fallen 6.7%.

The stock is down 19.4% from its 52-week high level of $111.35 on Apr 4, 2022, making it relatively affordable for investors. WIX has increased 16.4% in the past year against a 11.2% plunge in the Zacks sub-industry.

Image Source: Zacks Investment Research

Solid Rank: WIX has the favorable combination of a Growth Score of A and currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or 2 and a Growth Score of A or B offer solid investment opportunities.

Positive Earnings Surprise History: WIX has an impressive surprise record. Earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average being 225%.

Upbeat Guidance: For first-quarter 2023, revenues are expected to be between $367 million and $371 million, suggesting 7-9% growth from the prior-year quarter's reported figure.

The company now expects 2023 revenues to grow 9-11% and be in the range of $1,510-$1,535 million.

Robust Estimates: The Zacks Consensus Estimate for 2023 and 2024 earnings is pegged at $1.42 and $2.25, compared with the year ago loss of 17 cents and earnings of $1.42 per share, respectively.

Also, revenues for 2023 and 2024 are estimated to be $1.52 billion and $1.70 billion, indicating year-over-year growth of 9.5% and 12.1%, respectively.

The company reported non-GAAP earnings of 61 cents per share for fourth-quarter 2022, exceeding the Zacks Consensus Estimate of 8 cents. The company had incurred a loss of 34 cents per share in the previous-year quarter.

Total revenues increased 6% year over year to $355 million, beating the Zacks Consensus Estimate of $351.7 million. On a constant-currency basis, total revenues were $361.4 million, up 8% year over year.

Growth Prospects

Wix is a cloud-based web development platform which offers solutions enabling businesses, organizations, professionals and individuals to develop customized websites and application platforms.

Per an iMarc report, the global e-commerce market is forecast to witness a CAGR of 27.4% between 2023 and 2028 and reach $70.9 trillion.

The company is likely to benefit from the continued momentum seen in annualized recurring revenues from Creative subscriptions and robust uptake of Wix Editor and other new e-commerce applications.

Apart from that, the conversion of new users to paid subscriptions, strong customer retention and increasing average revenue per subscription augurs well. At the end of 2022, registered users were 243 million, up 10% year over year. The company added 96,000 net premium subscriptions in 2022.

The company expects the previously announced cost reduction plan to generate an additional $50 million in savings in 2023.

Strategic Collaborations & Product Launches

In March, Wix announced that it is extending its partnership with Stripe to launch Tap to Pay on iPhone for its U.S.-based Wix merchants. Merchants can utilize the Wix Owner App to accept secure and contactless payments directly on their iPhones.

In February, Wix announced an AI Text Creator that enables Wix Editor users to create, manage and grow their online presence with quality site content. The AI Text Creator creates tailored titles, taglines and paragraphs within seconds, eliminating the time-consuming effort required to produce a “professional-looking” website.

Few Headwinds

Apart from its solid fundamentals, the company is prone to several risks. The company operates in a highly competitive and capital-intensive e-commerce market. This is likely to negatively impact the company’s performance.

Also, the volatile macroeconomic environment and unfavorable foreign currency movement are major concerns.

Other Stocks to Consider

Some other top-ranked stocks in the broader technology space are Arista Networks (ANET Quick QuoteANET - Free Report) , Perion Network (PERI Quick QuotePERI - Free Report) and Pegasystems (PEGA Quick QuotePEGA - Free Report) , each presently sporting a Zacks Rank #1.

The Zacks Consensus Estimate for Arista Networks 2023 earnings is pegged at $5.79 per share, rising 11.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.

Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 23.1% in the past year.

The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, rising 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.

Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have increased 66% in the past year.

The Zacks Consensus Estimate for Pegasystems 2023 earnings is pegged at $1.31 per share, rising 111.3% in the past 60 days.

Pegasystems earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of the company have declined 40.8% in the past year.