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Peers like Shopify (SHOP - Free Report) , GoDaddy Inc. (GDDY - Free Report) and BigCommerce Holdings, Inc. (BIGC - Free Report) have also registered declines of 27.1%, 18.8%, and 12.9%, respectively, in the same time frame.
Price Performance
Image Source: Zacks Investment Research
The stock has seen a sharp decline of 19% since reporting fourth-quarter 2024 results on Feb. 19. WIX’s non-GAAP earnings per share (EPS) of $1.93 exceeded the Zacks Consensus Estimate of $1.61 and EPS of $1.22 reported in the year-ago quarter. Quarterly revenues increased 14% year over year to $460.5 million but missed the Zacks Consensus Estimate of $461.3 million. However, WIX’s commentary surrounding the increased forex volatility may have sparked investors’ concerns.
Investors are now likely contemplating whether to maintain their positions or make an exit. Let’s discuss the pros and cons of WIX and ascertain the best course of action for your portfolio.
WIX’s Long-Term Growth Catalysts
WIX is focusing on generative AI as it represents a significant business growth driver. The launch of the AI Website Builder in 2024 has provided users with a transformative experience and is now the mainstay of WIX’s AI portfolio. More than one million sites have been created and published using AI Website Builder. This innovative product is strengthening Wix’s competitive position as it enhances conversion rates and is driving increased purchase behavior, which is crucial for long-term revenue expansion.
It continues to add new products to gain on the AI boom. In January 2025, Wix unveiled Business Launcher, an AI-driven tool designed to help users transform new business ideas into reality, from concept to execution. The tool analyzes users' skills, experience and goals to generate personalized business ideas with just a few questions or by uploading a resume. In December 2024, Wix launched its first monetized product, AI Site-Chat, a virtual agent that helps businesses engage visitors 24/7, address queries and provide real-time info. It improves customer experience and boosts potential sales.
WIX is also embedding AI assistants across its platform. New AI business assistants are improving operational efficiency and customer conversion rates. Its specialized AI Marketing Agent is currently in the early rollout stages.
WIX Studio, the company’s premium offering for agencies and professionals, currently has more than 2 million accounts, with 75% created by new Partners, forming a vibrant community of creative professionals. The platform’s compelling features and efficiency have made it the foremost choice for larger projects.
Product innovation is driving conversion across both Self Creators and Partners channels. Self-Creators’ business witnessed increasing growth in 2024, driven by WIX’s AI product suite. WIX added it was working on a product that would expand “powerful design capabilities beyond just websites” and is expected to launch around spring. The other solution will aid Sales Creators to build their presence on the Internet and is anticipated to roll out in early fall. For the Partners business, WIX also has an innovative product lineup for 2025. The company will add new advanced design tools and integrations with business applications to the Studio Platform which are expected to further fuel growth in this segment.
Robust activity in the commerce segment further contributed to bookings and revenue acceleration. Bookings were up 15% in 2024. The continued evolution of AI and Studio offerings is expected to drive revenue growth. AI-powered solutions will not only enhance user experience but also create opportunities for direct monetization, providing a significant tailwind for 2025 and beyond.
Also, WIX’s strategy on onboarding higher intent users and maximizing the lifetime value of its current user base along with targeting marketing bodes well. WIX observed that its first quarter 2024 cohort generated $61 million in cumulative bookings through its first four quarters, second only to the first quarter of 2021 cohort, which gained from COVID pandemic-related tailwinds.
Wix is committed to balancing sustainable revenue growth with improved operating efficiencies. The company aims to achieve "Rule of 45" at the high end of its 2025 outlook, a financial strategy that integrates revenue growth rate and profit margin. Strong execution in AI, Studio and operational cost management is likely to drive higher margins and record profitability.
Challenges Lie Ahead for WIX
Approximately 40% of Wix’s revenues are generated in non-U.S. dollar currencies, making it susceptible to foreign exchange fluctuations. The company experienced unfavorable forex impacts in the middle of the fourth quarter of 2024 and spanning till early 2025, mainly due to the strengthening U.S. dollar against the euro and British pound.
Based on late January spot rates, Wix expects significant forex headwinds to weigh on its 2025 outlook. Wix expects 2025 total bookings of $260 million, growing 11-13% year over year. Forex headwinds, mainly from U.S. dollar to euro and British pound changes, are forecasted at $45 million for the year. It projects 14-16% revenue growth for 2025 on a constant currency basis.
However, due to a $34 million forex impact, growth on a reported basis is expected to be 12-14%. For the first quarter of 2025, revenues are expected to be between $469 million and $473 million, suggesting 12-13% growth from the prior-year quarter's reported figure and 13-14% at cc, including roughly $6 million of adverse forex impact. Stiff competition and increasing expenses are additional headwinds.
Following the earnings announcements, analysts have revised earnings estimate downward for the current year.
Image Source: Zacks Investment Research
Moreover, WIX is now trading below the 50 and 100-day moving averages, indicating a bearish performance in the near term.
Image Source: Zacks Investment Research
How to Strategize Investment in WIX
With higher bookings, a solid commerce platform, an expanding AI product and increasing Studio adoption, Wix is well-positioned to capitalize on long-term opportunities. However, increasing costs and forex volatility could put downward pressure on the stock.
Investors should wait for a favorable entry point at the moment, but investors already owning the stock can stay put given strong fundamentals.
Image: Bigstock
WIX Slides 22% in a Month: How Should Investors Play the Stock?
Wix.com Ltd. (WIX - Free Report) has witnessed a sharp decline of 22.3% in stock price in the past month, which is steeper than the 13.5%, 12.5% and 8.4% declines of the Computer IT Services Industry, broader Zacks Computer and Technology Sector and the S&P 500 Composite, respectively.
Peers like Shopify (SHOP - Free Report) , GoDaddy Inc. (GDDY - Free Report) and BigCommerce Holdings, Inc. (BIGC - Free Report) have also registered declines of 27.1%, 18.8%, and 12.9%, respectively, in the same time frame.
Price Performance
Image Source: Zacks Investment Research
The stock has seen a sharp decline of 19% since reporting fourth-quarter 2024 results on Feb. 19. WIX’s non-GAAP earnings per share (EPS) of $1.93 exceeded the Zacks Consensus Estimate of $1.61 and EPS of $1.22 reported in the year-ago quarter. Quarterly revenues increased 14% year over year to $460.5 million but missed the Zacks Consensus Estimate of $461.3 million. However, WIX’s commentary surrounding the increased forex volatility may have sparked investors’ concerns.
Investors are now likely contemplating whether to maintain their positions or make an exit. Let’s discuss the pros and cons of WIX and ascertain the best course of action for your portfolio.
WIX’s Long-Term Growth Catalysts
WIX is focusing on generative AI as it represents a significant business growth driver. The launch of the AI Website Builder in 2024 has provided users with a transformative experience and is now the mainstay of WIX’s AI portfolio. More than one million sites have been created and published using AI Website Builder. This innovative product is strengthening Wix’s competitive position as it enhances conversion rates and is driving increased purchase behavior, which is crucial for long-term revenue expansion.
It continues to add new products to gain on the AI boom. In January 2025, Wix unveiled Business Launcher, an AI-driven tool designed to help users transform new business ideas into reality, from concept to execution. The tool analyzes users' skills, experience and goals to generate personalized business ideas with just a few questions or by uploading a resume. In December 2024, Wix launched its first monetized product, AI Site-Chat, a virtual agent that helps businesses engage visitors 24/7, address queries and provide real-time info. It improves customer experience and boosts potential sales.
WIX is also embedding AI assistants across its platform. New AI business assistants are improving operational efficiency and customer conversion rates. Its specialized AI Marketing Agent is currently in the early rollout stages.
WIX Studio, the company’s premium offering for agencies and professionals, currently has more than 2 million accounts, with 75% created by new Partners, forming a vibrant community of creative professionals. The platform’s compelling features and efficiency have made it the foremost choice for larger projects.
Product innovation is driving conversion across both Self Creators and Partners channels. Self-Creators’ business witnessed increasing growth in 2024, driven by WIX’s AI product suite. WIX added it was working on a product that would expand “powerful design capabilities beyond just websites” and is expected to launch around spring. The other solution will aid Sales Creators to build their presence on the Internet and is anticipated to roll out in early fall. For the Partners business, WIX also has an innovative product lineup for 2025. The company will add new advanced design tools and integrations with business applications to the Studio Platform which are expected to further fuel growth in this segment.
Wix.com Ltd. Price, Consensus and EPS Surprise
Wix.com Ltd. price-consensus-eps-surprise-chart | Wix.com Ltd. Quote
Robust activity in the commerce segment further contributed to bookings and revenue acceleration. Bookings were up 15% in 2024. The continued evolution of AI and Studio offerings is expected to drive revenue growth. AI-powered solutions will not only enhance user experience but also create opportunities for direct monetization, providing a significant tailwind for 2025 and beyond.
Also, WIX’s strategy on onboarding higher intent users and maximizing the lifetime value of its current user base along with targeting marketing bodes well. WIX observed that its first quarter 2024 cohort generated $61 million in cumulative bookings through its first four quarters, second only to the first quarter of 2021 cohort, which gained from COVID pandemic-related tailwinds.
Wix is committed to balancing sustainable revenue growth with improved operating efficiencies. The company aims to achieve "Rule of 45" at the high end of its 2025 outlook, a financial strategy that integrates revenue growth rate and profit margin. Strong execution in AI, Studio and operational cost management is likely to drive higher margins and record profitability.
Challenges Lie Ahead for WIX
Approximately 40% of Wix’s revenues are generated in non-U.S. dollar currencies, making it susceptible to foreign exchange fluctuations. The company experienced unfavorable forex impacts in the middle of the fourth quarter of 2024 and spanning till early 2025, mainly due to the strengthening U.S. dollar against the euro and British pound.
Based on late January spot rates, Wix expects significant forex headwinds to weigh on its 2025 outlook. Wix expects 2025 total bookings of $260 million, growing 11-13% year over year. Forex headwinds, mainly from U.S. dollar to euro and British pound changes, are forecasted at $45 million for the year. It projects 14-16% revenue growth for 2025 on a constant currency basis.
However, due to a $34 million forex impact, growth on a reported basis is expected to be 12-14%. For the first quarter of 2025, revenues are expected to be between $469 million and $473 million, suggesting 12-13% growth from the prior-year quarter's reported figure and 13-14% at cc, including roughly $6 million of adverse forex impact. Stiff competition and increasing expenses are additional headwinds.
Following the earnings announcements, analysts have revised earnings estimate downward for the current year.
Image Source: Zacks Investment Research
Moreover, WIX is now trading below the 50 and 100-day moving averages, indicating a bearish performance in the near term.
Image Source: Zacks Investment Research
How to Strategize Investment in WIX
With higher bookings, a solid commerce platform, an expanding AI product and increasing Studio adoption, Wix is well-positioned to capitalize on long-term opportunities. However, increasing costs and forex volatility could put downward pressure on the stock.
Investors should wait for a favorable entry point at the moment, but investors already owning the stock can stay put given strong fundamentals.
WIX carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.