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Here's How WIX is Placed Just Ahead of Q1 Earnings Release

Read MoreHide Full Article Ltd (WIX - Free Report) is slated to report first-quarter 2024 results on May 20.

The company expects first-quarter revenues 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, indicating an increase of 11.7% from a year ago.

The Zacks Consensus Estimate for earnings is pegged at $1.03 per share. The company reported earnings of 91 cents in the year-earlier quarter.

WIX’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 124.1%.

Wix stock has risen 66.4% compared with sub-industry’s growth of 48.7% in the past year.

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Factors to Consider

Growth in the number of registered users and premium subscriptions are key revenue drivers. At the end of fourth-quarter 2023, registered users were 263 million.

Average revenue per subscription is likely to have been driven by the shift to higher-tier packages, high pricing, and increased adoption and usage of business solution products.

Healthy adoption of WIX Studio is likely to have driven the overall monetization of partner cohorts. In the last reported quarter, revenues from Partners business grew nearly 38% year over year. Increasing revenues from B2B businesses are added positives.  

Apart from Momentum in WIX studio, efforts to tap the growing demand for artificial intelligence (AI)-enabled products through new products like Conversational AI Chat for businesses and AI Meta Tags Creator bode well.

The Zacks Consensus Estimate for revenues from the Creative Subscriptions and Business Solutions segments is pegged at $305 million and $112 million, respectively. Ltd. Price and EPS Surprise Ltd. Price and EPS Surprise Ltd. price-eps-surprise | Ltd. Quote

However, increasing expenses, volatile macroeconomic environment and unfavorable foreign currency fluctuations are expected to have weighed down on the company’s performance.

Recent Developments

On May 9, 2024, Wix launched the AI Portfolio Creator, a groundbreaking tool, that leverages the power of AI to aid users in crafting and showcasing an online professional portfolio.

On May 1, 2024, it unveiled Wix Proposals, which is powered by business proposal software, Prospero. The cutting-edge tool is designed to aid management with long-term financial engagements, offering modernized features to smoothly create, personalize and finalize proposals according to their unique business needs.

On Apr 17, 2024, management announced the expansion of WIX Marketplace for its partners. Partners creating templates using Wix Studio can also directly sell them on the platform and offer services too. The initiative was undertaken to generate new monetizing opportunities for partners.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Wix this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Wix has an Earnings ESP of 0.00% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around.

Abercrombie & Fitch Co (ANF - Free Report) has an Earnings ESP of +5.10% and currently has a Zacks Rank of 2. ANF is set to announce quarterly figures on May 29.

The Zacks Consensus Estimate for ANF’s earnings and revenues is pegged at $1.54 per share and $940 million, respectively. Shares of ANF have risen 468.2% in the past year.

The Gap, Inc (GPS - Free Report) has an Earnings ESP of +14.13% and presently sports a Zacks Rank #1. GPS is slated to release quarterly numbers on May 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GPS’ earnings and revenues is pegged at 13 cents per share and $3.28 billion, respectively. Shares of GPS have risen 182% in the past year..

Zscaler, Inc (ZS - Free Report) has an Earnings ESP of +0.39% and currently carries a Zacks Rank #2. ZS is scheduled to report quarterly earnings on May 30.

The Zacks Consensus Estimate for ZS’ earnings and revenues is pegged at 65 cents per share and $535.6 million, respectively. Shares of ZS have risen 52.5% in the past year.

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