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WIX Stock Surges 17.8% YTD: Will the Upward Trend Continue?
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Wix.com (WIX - Free Report) is witnessing healthy momentum this year so far. Shares of the company have gained 17.8% year to date compared with the sub-industry’s growth of 15.6%.
Wix is a cloud-based web development platform which offers solutions enabling businesses, organizations, professionals and individuals to develop customized websites and application platforms.
Image Source: Zacks Investment Research
Catalysts Behind the Price Surge
Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #2 (Buy) stock.
The increase in share price is driven by the company’s robust financial performance. The company came up with an impressive performance in second-quarter fiscal 2023.
The company reported non-GAAP diluted earnings per share (EPS) of $1.26 for second-quarter 2023, exceeding the Zacks Consensus Estimate of 54 cents. The company had incurred a loss of 14 cents in the previous-year quarter. Total revenues increased 13% year over year to $390 million, beating the Zacks Consensus Estimate of $381.8 million.
The company plans to tap the growing demand for artificial intelligence (AI) by launching new products like AI Site Generator and AI Assistant for businesses. These capabilities leverage the power of AI to automate various aspects of the website creation process, empowering businesses to grow and operate more efficiently.
The company is likely to benefit from the continued momentum 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 second-quarter end, registered users were 254 million.
WIX’s 2023 and 2024 revenues are anticipated to rise 11.8% and 11.9% year over year, respectively. The company now expects 2023 revenues to grow 11-12% and in the range of $1,543-$1,558 million (earlier view: growth of 10-11% and in the range of $1,522-$1,543 million).
WIX outpaced estimates in all the trailing four quarters, delivering an earnings surprise of 319.3%, on average.
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.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 EPS has increased 15.9% in the past 60 days to $4.15.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 26.1% in the past year.
The Zacks Consensus Estimate for Aspen Technology’s fiscal 2024 EPS has increased 5.8% in the past 60 days to $6.58.
Aspen Technology’s long-term earnings growth rate is 17.1%. Shares of AZPN have declined 11.3% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has increased 6.3% in the past 60 days to $2.86.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 6.7%. Shares of BMI have surged 63.1% in the past year.
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WIX Stock Surges 17.8% YTD: Will the Upward Trend Continue?
Wix.com (WIX - Free Report) is witnessing healthy momentum this year so far. Shares of the company have gained 17.8% year to date compared with the sub-industry’s growth of 15.6%.
Wix is a cloud-based web development platform which offers solutions enabling businesses, organizations, professionals and individuals to develop customized websites and application platforms.
Image Source: Zacks Investment Research
Catalysts Behind the Price Surge
Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #2 (Buy) stock.
The increase in share price is driven by the company’s robust financial performance. The company came up with an impressive performance in second-quarter fiscal 2023.
The company reported non-GAAP diluted earnings per share (EPS) of $1.26 for second-quarter 2023, exceeding the Zacks Consensus Estimate of 54 cents. The company had incurred a loss of 14 cents in the previous-year quarter. Total revenues increased 13% year over year to $390 million, beating the Zacks Consensus Estimate of $381.8 million.
The company plans to tap the growing demand for artificial intelligence (AI) by launching new products like AI Site Generator and AI Assistant for businesses. These capabilities leverage the power of AI to automate various aspects of the website creation process, empowering businesses to grow and operate more efficiently.
The company is likely to benefit from the continued momentum 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 second-quarter end, registered users were 254 million.
WIX’s 2023 and 2024 revenues are anticipated to rise 11.8% and 11.9% year over year, respectively. The company now expects 2023 revenues to grow 11-12% and in the range of $1,543-$1,558 million (earlier view: growth of 10-11% and in the range of $1,522-$1,543 million).
WIX outpaced estimates in all the trailing four quarters, delivering an earnings surprise of 319.3%, on average.
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.
Other Stocks to Consider
Some other top-ranked stocks in the broader technology space are Woodward (WWD - Free Report) , Aspen Technology (AZPN - Free Report) and Badger Meter (BMI - Free Report) . Woodward presently sports a Zacks Rank #1 (Strong Buy), whereas Aspen Technology and Badger Meter currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 EPS has increased 15.9% in the past 60 days to $4.15.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 26.1% in the past year.
The Zacks Consensus Estimate for Aspen Technology’s fiscal 2024 EPS has increased 5.8% in the past 60 days to $6.58.
Aspen Technology’s long-term earnings growth rate is 17.1%. Shares of AZPN have declined 11.3% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has increased 6.3% in the past 60 days to $2.86.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 6.7%. Shares of BMI have surged 63.1% in the past year.