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WIX Stock Rises 38% in One Year: Will the Rally Continue?
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Wix.com’s (WIX - Free Report) performance is gaining from continued momentum across segments as well as launch of innovative products.
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.
Solid financial performance has also led to a good run on the trading front. The stock is continuing its upward trajectory with a gain of 37.8% compared with 24.9% growth of S&P Composite.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) stock appears to be a solid investment option at the moment.
Image Source: Zacks Investment Research
Apart from a favorable rank, WIX has a VGM Score of B. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or 2 and a VGM Score of A or B offer solid investment opportunities.
WIX outpaced estimates in each of the trailing four quarters, delivering an earnings surprise of 124.1%, on average.
The Zacks Consensus Estimate for WIX’s 2024 and 2025 EPS is pegged at $4.80 and $6.50, suggesting an increase of 9.3% and 35.4%, respectively, from a year ago. The Zacks Consensus Estimate for fiscal 2024 and 2025 earnings has improved 2.8% and 6%, respectively, in the past 60 days.
The long-term earnings growth rate is pegged at 25%.
Revenues for 2024 and 2025 are projected to rise 13.9% and 11.2% to $1.78 billion and $1.98 billion, respectively.
Factors Fueling Growth
Momentum in the Creative Subscriptions and Business Solutions segments is driving the top-line performance. Frequent launch of products, growth in the number of registered users and premium subscriptions are key drivers.
Creative Subscriptions’ revenues (73.3% of total revenues) increased 12% year over year to $296.2 million in the last reported quarter. Business Solutions’ revenues (26.7%) rose 20% to $107.6 million.
The company plans to tap the growing demand for Artificial Intelligence (AI) through the launch of innovative products like AI Site Generator, AI Chat Experience for businesses and AI Code Assistant.
Healthy adoption of Wix Studio is likely to drive overall monetization of partner cohorts. The average revenue per subscription is being driven by the shift to higher-tier packages, higher pricing, and increased adoption and usage of business solution products.
Going ahead, WIX expects 2024 bookings and revenues to benefit from a stable and positively trending macro environment coupled with solid business momentum.
The company anticipates 2024 revenues to grow 11-13% and in the range of $1.73-$1.76 billion.
Management estimates free cash flow (excluding HQ capital expenditure) in the range of $370-$400 million, representing 21-23% of revenues.
For first-quarter 2024, revenues are expected to be between $415 million and $419 million, suggesting 11-12% growth from the prior-year quarter's reported figure. The Zacks Consensus Estimate is pegged at $417.7 million, suggesting 11.7% growth from the year-ago levels.
Headwinds Persist
However, unfavorable foreign currency movement and rising accumulated deficit are headwinds.
Increasing investments on product development, infrastructure and platform along with stiff competition remain concerning.
The Zacks Consensus Estimate for SNPS’ fiscal 2024 EPS is pegged at $13.36. The long-term earnings growth rate is 17.5%. SNPS’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of SNPS have soared 46.5% in the past year.
The Zacks Consensus Estimate for IRDM’s 2024 EPS has increased 148.3% in the past 60 days to 72 cents. Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and missed twice. The average earnings surprise is 91.7%.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. MSFT’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is 16.2%. Shares of MSFT have rallied 46.7% in the past year.
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WIX Stock Rises 38% in One Year: Will the Rally Continue?
Wix.com’s (WIX - Free Report) performance is gaining from continued momentum across segments as well as launch of innovative products.
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.
Solid financial performance has also led to a good run on the trading front. The stock is continuing its upward trajectory with a gain of 37.8% compared with 24.9% growth of S&P Composite.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) stock appears to be a solid investment option at the moment.
Image Source: Zacks Investment Research
Apart from a favorable rank, WIX has a VGM Score of B. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or 2 and a VGM Score of A or B offer solid investment opportunities.
WIX outpaced estimates in each of the trailing four quarters, delivering an earnings surprise of 124.1%, on average.
The Zacks Consensus Estimate for WIX’s 2024 and 2025 EPS is pegged at $4.80 and $6.50, suggesting an increase of 9.3% and 35.4%, respectively, from a year ago. The Zacks Consensus Estimate for fiscal 2024 and 2025 earnings has improved 2.8% and 6%, respectively, in the past 60 days.
The long-term earnings growth rate is pegged at 25%.
Revenues for 2024 and 2025 are projected to rise 13.9% and 11.2% to $1.78 billion and $1.98 billion, respectively.
Factors Fueling Growth
Momentum in the Creative Subscriptions and Business Solutions segments is driving the top-line performance. Frequent launch of products, growth in the number of registered users and premium subscriptions are key drivers.
Creative Subscriptions’ revenues (73.3% of total revenues) increased 12% year over year to $296.2 million in the last reported quarter. Business Solutions’ revenues (26.7%) rose 20% to $107.6 million.
The company plans to tap the growing demand for Artificial Intelligence (AI) through the launch of innovative products like AI Site Generator, AI Chat Experience for businesses and AI Code Assistant.
Healthy adoption of Wix Studio is likely to drive overall monetization of partner cohorts. The average revenue per subscription is being driven by the shift to higher-tier packages, higher pricing, and increased adoption and usage of business solution products.
Going ahead, WIX expects 2024 bookings and revenues to benefit from a stable and positively trending macro environment coupled with solid business momentum.
The company anticipates 2024 revenues to grow 11-13% and in the range of $1.73-$1.76 billion.
Management estimates free cash flow (excluding HQ capital expenditure) in the range of $370-$400 million, representing 21-23% of revenues.
For first-quarter 2024, revenues are expected to be between $415 million and $419 million, suggesting 11-12% growth from the prior-year quarter's reported figure. The Zacks Consensus Estimate is pegged at $417.7 million, suggesting 11.7% growth from the year-ago levels.
Headwinds Persist
However, unfavorable foreign currency movement and rising accumulated deficit are headwinds.
Increasing investments on product development, infrastructure and platform along with stiff competition remain concerning.
Other Stocks to Consider
Some other top-ranked stocks worth consideration in the broader technology space are Synopsys (SNPS - Free Report) , Iridium Communications (IRDM - Free Report) and Microsoft (MSFT - Free Report) . While SNPS and IRDM sport a Zacks Rank #1 each, MSFT carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for SNPS’ fiscal 2024 EPS is pegged at $13.36. The long-term earnings growth rate is 17.5%. SNPS’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of SNPS have soared 46.5% in the past year.
The Zacks Consensus Estimate for IRDM’s 2024 EPS has increased 148.3% in the past 60 days to 72 cents. Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and missed twice. The average earnings surprise is 91.7%.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. MSFT’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is 16.2%. Shares of MSFT have rallied 46.7% in the past year.