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WIX Gains 42.8% in the Past Year: Will the Rally Continue?
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Wix.com (WIX - Free Report) is witnessing strong momentum, with shares having rallied 42.8% in the past year compared with 35.5% and 20.2% growth of the sub-industry and S&P Composite, respectively.
Headquartered in Tel Aviv, Israel and founded in 2006, WIX is a cloud-based web development platform. It offers solutions that enable businesses, organizations, professionals and individuals to develop customized websites and application platforms, and grow their online presence.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #1 (Strong Buy) stock appears to be a solid investment option at the moment.
Apart from a favorable rank, WIX has a Growth Score of A. Per Zacks proprietary methodology, stocks with a combination of a Zacks Rank #1 or #2 (Buy) and a VGM Score of A or B offer solid investment opportunities.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for WIX’s 2023 earnings per share (EPS) estimate is pegged at $4.18. It incurred a loss of 17 cents per share in 2022. The Zacks Consensus Estimate for 2024 EPS is pegged at $4.67.
The Zacks Consensus Estimate for 2023 EPS has increased to $4.18 from $4.09 in the past 60 days, reflecting analysts’ optimism. The consensus estimate for 2024 EPS has improved to $4.67 from $4.43 over the same time frame.
The company’s revenues for 2023 are projected to rise 12.5% to $1.56 billion. For 2024, the metric is anticipated to climb 11.8% to $1.74 billion.
WIX outpaced estimates in each of the trailing four quarters, delivering an earnings surprise of 283.6%, on average.
Factors at Play
Frequent launch of new products, growth in the number of registered users and premium subscriptions are key revenue drivers.
WIX expects momentum in Wix Studio to drive top-line performance going ahead. In August 2023, the company had unveiled Wix Studio, which allows users to leverage latest Artificial Intelligence (AI) technology and develop advanced websites at scale. Management had highlighted earlier that the users particularly liked the AI Code Assistant within the new Wix IDE, which enabled them to write codes easily and detect errors quickly.
The company plans to tap the growing demand for AI-enabled products through the launch of new products like Conversational AI Chat for businesses and AI Meta Tags Creator. Conversational AI chat helps users to build their online business profile and enhance their website while AI Meta Tag Creator is an AI-powered SEO tool to help users generate customized title tags and meta descriptions.
Increasing revenues from Partners business as well as B2B business bode well in the long run. In the last reported quarter, revenues from Partners business grew 38% year over year.
The conversion of new users to paid subscriptions, increasing monetization and strong customer retention is driving average revenue per subscriptions. Going ahead, the company expects 2023 revenues and free cash flow margin to rise owing to business momentum.
Management now anticipates 2023 revenues to grow 12-13% and in the range of $1,558-$1,563 million (earlier view: growth of 11-12% and in the range of $1,543-$1,558 million).
WIX estimates free cash flow (excluding HQ capital expenditure) in the range of $235-$240 million, representing 15% of revenues. Earlier, it had projected the metric (excluding HQ capital expenditure) to be between $200 million and $210 million, representing 13% of revenues.
However, non-GAAP operating expenses are expected to decline 53-54% of revenues compared with the earlier guided range of 56-57%.
For fourth-quarter 2023, revenues are expected to be between $400 million and $405 million, suggesting 13-14% growth from the prior-year quarter's reported figure. The Zacks Consensus Estimate is pegged at $402.6 million, indicating an increase of 13.4% from a year ago.
A Few Headwinds
Volatile macroeconomic environment and unfavorable foreign currency fluctuations could weigh down on the company’s performance.
Stiff competition and rising accumulated deficit remain concerning.
The Zacks Consensus Estimate for Watts Water Technologies’ 2023 EPS has improved by 1.1% in the past 60 days to $8.09. WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have jumped 22.1% in the past year.
The Zacks Consensus Estimate for 2023 is pegged at a loss of 9 cents per share for NETGEAR, which remained unchanged in the past 30 days. NTGR’s earnings outpaced the Zacks Consensus Estimate in three of the last four quarters while missing once. The average surprise was 127.5%. Shares of NTGR were down 28.8% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2023 EPS has improved by 1% in the past 60 days to $3.86. BLKB’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 10.6%. Shares of BLKB have gained 31.5% in the past year.
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WIX Gains 42.8% in the Past Year: Will the Rally Continue?
Wix.com (WIX - Free Report) is witnessing strong momentum, with shares having rallied 42.8% in the past year compared with 35.5% and 20.2% growth of the sub-industry and S&P Composite, respectively.
Headquartered in Tel Aviv, Israel and founded in 2006, WIX is a cloud-based web development platform. It offers solutions that enable businesses, organizations, professionals and individuals to develop customized websites and application platforms, and grow their online presence.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #1 (Strong Buy) stock appears to be a solid investment option at the moment.
Apart from a favorable rank, WIX has a Growth Score of A. Per Zacks proprietary methodology, stocks with a combination of a Zacks Rank #1 or #2 (Buy) and a VGM Score of A or B offer solid investment opportunities.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for WIX’s 2023 earnings per share (EPS) estimate is pegged at $4.18. It incurred a loss of 17 cents per share in 2022. The Zacks Consensus Estimate for 2024 EPS is pegged at $4.67.
The Zacks Consensus Estimate for 2023 EPS has increased to $4.18 from $4.09 in the past 60 days, reflecting analysts’ optimism. The consensus estimate for 2024 EPS has improved to $4.67 from $4.43 over the same time frame.
The company’s revenues for 2023 are projected to rise 12.5% to $1.56 billion. For 2024, the metric is anticipated to climb 11.8% to $1.74 billion.
WIX outpaced estimates in each of the trailing four quarters, delivering an earnings surprise of 283.6%, on average.
Factors at Play
Frequent launch of new products, growth in the number of registered users and premium subscriptions are key revenue drivers.
WIX expects momentum in Wix Studio to drive top-line performance going ahead. In August 2023, the company had unveiled Wix Studio, which allows users to leverage latest Artificial Intelligence (AI) technology and develop advanced websites at scale. Management had highlighted earlier that the users particularly liked the AI Code Assistant within the new Wix IDE, which enabled them to write codes easily and detect errors quickly.
The company plans to tap the growing demand for AI-enabled products through the launch of new products like Conversational AI Chat for businesses and AI Meta Tags Creator. Conversational AI chat helps users to build their online business profile and enhance their website while AI Meta Tag Creator is an AI-powered SEO tool to help users generate customized title tags and meta descriptions.
Increasing revenues from Partners business as well as B2B business bode well in the long run. In the last reported quarter, revenues from Partners business grew 38% year over year.
The conversion of new users to paid subscriptions, increasing monetization and strong customer retention is driving average revenue per subscriptions.
Going ahead, the company expects 2023 revenues and free cash flow margin to rise owing to business momentum.
Management now anticipates 2023 revenues to grow 12-13% and in the range of $1,558-$1,563 million (earlier view: growth of 11-12% and in the range of $1,543-$1,558 million).
WIX estimates free cash flow (excluding HQ capital expenditure) in the range of $235-$240 million, representing 15% of revenues. Earlier, it had projected the metric (excluding HQ capital expenditure) to be between $200 million and $210 million, representing 13% of revenues.
However, non-GAAP operating expenses are expected to decline 53-54% of revenues compared with the earlier guided range of 56-57%.
For fourth-quarter 2023, revenues are expected to be between $400 million and $405 million, suggesting 13-14% growth from the prior-year quarter's reported figure. The Zacks Consensus Estimate is pegged at $402.6 million, indicating an increase of 13.4% from a year ago.
A Few Headwinds
Volatile macroeconomic environment and unfavorable foreign currency fluctuations could weigh down on the company’s performance.
Stiff competition and rising accumulated deficit remain concerning.
Other Stocks to Consider
Other stocks worth consideration in the broader technology space include Watts Water Technologies (WTS - Free Report) , NETGEAR (NTGR - Free Report) and Blackbaud (BLKB - Free Report) . While NETGEAR and Blackbaud currently sport a Zacks Rank #1 each, Watts Water carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Watts Water Technologies’ 2023 EPS has improved by 1.1% in the past 60 days to $8.09. WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have jumped 22.1% in the past year.
The Zacks Consensus Estimate for 2023 is pegged at a loss of 9 cents per share for NETGEAR, which remained unchanged in the past 30 days. NTGR’s earnings outpaced the Zacks Consensus Estimate in three of the last four quarters while missing once. The average surprise was 127.5%. Shares of NTGR were down 28.8% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2023 EPS has improved by 1% in the past 60 days to $3.86. BLKB’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 10.6%. Shares of BLKB have gained 31.5% in the past year.