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On Friday, Baird analyst Vikram Kesavabhotla upgraded Wix.com (NASDAQ:WIX) stock from a Neutral to an Outperform rating, despite lowering the price target to $190 from the previous $215. According to InvestingPro data, Wix maintains a "GOOD" financial health score, and current analysis suggests the stock is trading below its Fair Value. Kesavabhotla expressed a positive outlook on the company, citing several reasons for the upgrade.
The analyst noted that the product offerings of Wix.com have become increasingly compelling, which contributed to the decision to adopt a more optimistic stance on the stock. This assessment aligns with the company’s strong revenue growth of ~13% and healthy gross profit margin of 68%. Kesavabhotla also mentioned that the expectations for Wix.com have become more reasonable following the company’s first-quarter earnings report.
Another factor influencing the upgrade is the attractiveness of the long-term drivers of Wix.com’s investment case. According to Kesavabhotla, these elements combined suggest that the stock currently presents a valuable opportunity for investors.
Wix.com shares have experienced a significant decline year-to-date, falling 28% compared to the S&P 500’s minor 1% decrease. The analyst believes that this recent sell-off has created an appealing entry point for investing in Wix.com, which he regards as a high-quality business with a continuously improving product lineup.
In summary, Baird’s revised stance on Wix.com reflects a belief in the company’s potential for growth and a favorable market position, despite the downward adjustment in the price target. The upgrade to an Outperform rating indicates confidence in the company’s future performance.
In other recent news, Wix.com has reported mixed quarterly results, drawing attention from several analysts. The company exceeded expectations with its first-quarter earnings, showing a 1% increase in bookings and revenue above consensus, and a 5% higher Free Cash Flow (FCF) than anticipated. However, Wix’s second-quarter revenue forecast fell short, and the company maintained its fiscal year 2025 guidance, indicating a reliance on growth in the latter half of the year. Benchmark, Piper Sandler, and UBS have all adjusted their price targets for Wix, citing concerns over a slowdown in the Partners segment and broader economic challenges.
Benchmark lowered its target to $230, maintaining a Buy rating, while Piper Sandler reduced its target to $225, retaining an Overweight rating. UBS also cut its target to $230 but upheld a Buy rating, noting that current exchange rates could benefit Wix’s financials in 2025. Cantor Fitzgerald maintained its $200 price target and an Overweight rating, highlighting Wix’s steady growth in the Self Create segment and innovation through AI-powered products. Despite these concerns, JMP analysts kept their $250 target, expressing confidence in Wix’s ability to sustain growth through strategic focus and product launches.
Wix has been active in product development, introducing features like Wixel and AI Site Chat, and plans a significant product launch later this year. The company is also considering price increases for 2026, with ongoing tests. Analysts suggest that Wix’s ongoing share buyback program and potential foreign exchange gains could positively impact its financial performance.
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