Wix (WIX) AI Stock Analysis

3,493 Followers

Top Page

Wix

(NASDAQ:WIX)

76Outperform

Wix's strong financial performance, particularly in cash flow management and earnings call guidance, supports a positive outlook with a score of 75.5. The company's revenue and profitability growth are promising, yet risks from a weak balance sheet and high valuation remain. Technical indicators suggest upward momentum, although caution is advised due to potential overbought conditions. Overall, Wix is positioned for growth, contingent on continued strategic execution and market conditions.

Positive Factors

AI and Innovation

Accelerating AI product innovation drives durable growth and disciplined operational expenses compound FCF generation.

Free Cash Flow Margin

Wix reported a strong 4Q with bookings and FCF ahead of expectations, and guidance implies continued top-line momentum and meaningful margin expansion in 2025.

New Product Launches

The introduction of new products in the latter half of the year could serve as a catalyst for average revenue per subscriber growth.

Negative Factors

Bookings Deceleration

Investors are being cautious around the implied deceleration in bookings growth in 1Q25, explained by lapping pricing tailwinds from 1Q24.

Bookings Growth Concerns

Anticipated bookings deceleration from +18% y/y in 4Q to +11% y/y in 1Q is largely explainable by pricing, a non-recurring Google Workspace payment, and foreign exchange impacts.

Foreign Exchange Impact

Reported growth is being impacted by foreign exchange and comparing against a price increase from last year.

Wix (WIX) vs. S&P 500 (SPY)

Market Cap

$10.00B

Dividend YieldN/A

Average Volume (3M)761.29K

Price to Earnings (P/E)79.5

Beta (1Y)1.45

Revenue Growth12.74%

EPS Growth327.43%

CountryUS

Employees4,399

SectorTechnology

Sector Strength69

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)1.93

Shares Outstanding55,668,175

10 Day Avg. Volume608,894

30 Day Avg. Volume761,289

Financial Highlights & Ratios

PEG Ratio1.57

Price to Book (P/B)-121.46

Price to Sales (P/S)0.00

P/FCF Ratio20.05

Enterprise Value/Market Cap0.99

Enterprise Value/Revenue1.47

Enterprise Value/Gross Profit8.24

Enterprise Value/Ebitda26.85

Forecast

1Y Price Target

$237.28

Price Target Upside28.34% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering20

Wix Business Overview & Revenue Model

Company DescriptionWix.com Ltd is a leading cloud-based development platform with millions of users worldwide. The company operates in the technology and software sector, providing a highly versatile and user-friendly platform that empowers individuals and businesses to build and manage their online presence. Wix offers a range of products and services that include website design, hosting, e-commerce solutions, and a variety of applications to enhance online functionality, catering to users from beginners to advanced developers.

How the Company Makes MoneyWix primarily generates revenue through a freemium model, where users can create websites for free but pay for premium features and services. The company's key revenue streams include subscription fees from premium plans, which offer enhanced functionalities such as custom domain names, increased bandwidth, and additional storage. Additionally, Wix earns money through ancillary services like domain registration, email accounts, and third-party app integrations available through its App Market. The company also benefits from partnerships and collaborations with various technology providers and service integrations that enhance its platform's capabilities and appeal to a broader user base.

Wix Key Performance Indicators (KPIs)

Any

Creative Subscription ARR

Creative Subscription ARR
Measures the annual recurring revenue from creative subscriptions, indicating the stability and growth potential of Wix’s core business model and customer loyalty.

Chart InsightsWix's Creative Subscription ARR has shown consistent growth, reaching $1.3 billion by late 2024. This upward trend is bolstered by the company's strategic focus on innovation, particularly through its AI and Studio platforms, which have significantly enhanced product offerings and customer engagement. Despite FX volatility and slower GPV growth, Wix's strong product momentum and profitability improvements, highlighted in their earnings call, suggest a robust outlook for 2025, with ambitious targets like achieving the 'rule of forty-five'.

Data provided by:

Main Street Data

Wix Financial Statement Overview

Summary

Wix shows a positive trajectory in revenue growth and profitability, reflecting strategic improvements and effective cost management. However, the balance sheet's negative equity and high liabilities pose financial stability risks. Strong cash flow generation is a key strength, supporting potential growth initiatives and financial flexibility. Continued focus on improving operational margins and strengthening the balance sheet will be crucial for sustaining long-term growth and stability.

Income Statement

Positive

Wix has demonstrated solid revenue growth, increasing from $761 million in 2019 to $1.76 billion in 2024. The gross profit margin has remained strong, around 68% in 2024, indicating efficient cost management. Notably, the net profit margin showed a turnaround from negative 11% in 2020 to a positive 7.9% in 2024, reflecting improved profitability. However, historical EBIT and EBITDA margins were negative, suggesting challenges in operational efficiency. Recent improvements in EBIT and EBITDA margins to 5.7% and 7.5% respectively in 2024 are encouraging.

Balance Sheet

Neutral

Wix's balance sheet reveals a concerning negative stockholders' equity in 2024, indicating liabilities exceed assets. This is a potential risk for financial stability. The debt-to-equity ratio is not meaningful due to negative equity, but total liabilities have been consistently high compared to assets. Return on equity is not applicable due to negative equity, but the company's ability to reduce net debt from $762 million in 2020 to $309 million in 2024 shows some improvement in leverage management.

Cash Flow

Very Positive

Wix exhibits strong cash flow management, with operating cash flow increasing significantly from $148 million in 2020 to $497 million in 2024. Free cash flow has also improved from negative figures in 2022 to $480 million in 2024, demonstrating effective capital expenditure control. The operating cash flow to net income ratio is robust, indicating strong cash conversion from earnings. This positions the company well for future investment opportunities and debt servicing.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.76B	1.56B	1.39B	1.27B	988.76M
	Gross Profit
1.20B	1.05B	861.44M	781.08M	673.06M
	EBIT
100.14M	-24.38M	-285.35M	-325.53M	-197.34M
	EBITDA
186.90M	69.11M	-439.05M	-28.07M	-104.20M
	Net Income Common Stockholders
138.32M	33.14M	-424.86M	-117.21M	-216.52M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.11B	962.89M	1.06B	1.32B	1.04B
	Total Assets
1.91B	1.80B	1.76B	2.06B	1.83B
	Total Debt
969.95M	996.32M	1.13B	1.03B	930.96M
	Net Debt
309.01M	386.70M	885.75M	582.58M	762.11M
	Total Liabilities
1.99B	1.86B	2.02B	1.91B	1.58B
	Stockholders Equity
-78.79M	-54.48M	-263.24M	145.72M	250.34M
Cash Flow		Free Cash Flow
479.60M	182.20M	-33.51M	27.98M	129.20M
	Operating Cash Flow
497.42M	248.25M	37.15M	65.69M	148.05M
	Investing Cash Flow
-35.47M	566.71M	-54.66M	376.87M	-800.23M
	Financing Cash Flow
-406.73M	-450.02M	-189.16M	-160.06M	552.94M

Wix Technical Analysis

Technical Analysis Sentiment

Positive

Last Price184.89

Price Trends

50DMA

167.82

Positive

100DMA

195.17

Negative

200DMA

185.03

Positive

Market Momentum

MACD

3.93

Negative

RSI

69.13

Neutral

STOCH

94.90

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WIX, the sentiment is Positive. The current price of 184.89 is above the 20-day moving average (MA) of 167.33, above the 50-day MA of 167.82, and below the 200-day MA of 185.03, indicating a bullish trend. The MACD of 3.93 indicates Negative momentum. The RSI at 69.13 is Neutral, neither overbought nor oversold. The STOCH value of 94.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WIX.

Wix Risk Analysis

Wix disclosed 59 risk factors in its most recent earnings report. Wix reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Wix Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WIX	76 Outperform	$10.00B	79.51	-46.79%	―	12.74%	327.43%
BOX	75 Outperform	$4.63B	23.61	189.40%	―	5.05%	103.11%
DBX	74 Outperform	$8.43B	19.51	-60.11%	―	0.79%	0.59%
AKAM	72 Outperform	$11.52B	26.63	9.82%	―	3.51%	-27.28%
GDDY	71 Outperform	$26.65B	35.99	245.70%	―	7.93%	-56.44%
MDB	63 Neutral	$15.66B	―	-6.70%	―	19.22%	28.46%
Sector *	60 Neutral	$11.39B	10.52	-6.21%	2.95%	7.68%	-11.12%

* Technology Sector Average

Performance Comparison

WIX

Wix

184.89

47.53

34.60%

AKAM

Akamai

77.51

-18.47

-19.24%

BOX

Box

31.65

4.61

17.05%

GDDY

GoDaddy

187.49

51.04

37.41%

MDB

MongoDB

193.74

-182.75

-48.54%

DBX

Dropbox

29.70

5.84

24.48%

Wix Earnings Call Summary

Earnings Call Date:Feb 19, 2025

(Q4-2024)

% Change Since: -18.83%|

Next Earnings Date:May 21, 2025

Earnings Call Sentiment Positive

Wix had a strong 2024, achieving its rule of forty milestone ahead of schedule with significant growth in bookings and revenue driven by successful product initiatives, particularly in AI and Studio. However, challenges such as FX volatility and slower-than-expected GPV growth due to situational factors were noted. Overall, the positive developments significantly outweigh the lowlights.

Q4-2024 Updates

Positive Updates

Rule of Forty Achieved

Wix exceeded its ambitious plan to achieve the rule of forty by 2025, reaching this milestone a year ahead of schedule. The company is now aiming for rule of forty-five in 2025.

Strong Bookings and Revenue Growth

Wix reported bookings growth of 18% year over year in Q4 2024, with partners' revenue growing 30% year over year. Total revenue in Q4 grew by 14% year over year to $460 million.

AI Product Suite Success

Wix's AI website builder drove significant conversion and purchase behavior improvements. Over one million sites have been created with the AI builder.

Positive Free Cash Flow and Profitability

Wix generated free cash flow of $488 million or 28% of revenue in 2024, nearly doubling from 2023. It achieved positive GAAP operating income for the first time.

Studio Platform Expansion

The Studio platform saw strong adoption with over two million studio accounts, 75% of which were created by partners.

Negative Updates

FX Volatility Impact

FX volatility late in Q4 created a modest negative impact on bookings and revenue, with a $45 million headwind expected for 2025.

Challenges in GPV Growth

GPV growth was slightly lower than expected due to situational factors like the Christmas holiday timing and FX headwinds, impacting transaction revenue.

Company Guidance

During the Wix Fourth Quarter and Full Year 2024 Earnings Conference Call, leadership provided detailed guidance for 2025, emphasizing robust growth and innovation. Wix aims to achieve the "rule of forty-five" in 2025, surpassing its initial target ahead of schedule. The company anticipates total bookings to reach between $2,025 million and $2,060 million, representing an 11% to 13% year-over-year increase, despite an estimated $45 million FX headwind. They project total revenue to rise by 12% to 14% year-over-year. Wix also expects non-GAAP total gross margin improvement to 70% and anticipates a free cash flow of $590 to $610 million, translating to a 30% to 31% revenue margin. The guidance reflects strong product momentum, particularly from the Studio platform, AI enhancements, and commerce capabilities, with an emphasis on managing expenses to drive profitability.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.