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Investing.com - CFRA lowered its price target on Wix.com (NASDAQ:WIX) to $140 from $200 while maintaining a Buy rating, citing expectations for slower revenue growth through 2026. The stock is currently trading at $92.61, near its 52-week low of $93.50, with InvestingPro data showing it’s significantly undervalued with analyst targets implying 78% upside potential.
The research firm projects a two-year revenue compound annual growth rate (CAGR) of 13% through 2026, down from the five-year CAGR of 18% through 2024. This projection aligns with Wix’s current revenue growth of 13.22% over the last twelve months. Despite the reduced growth outlook, CFRA expects premium subscriptions to increase, supported by product enhancements and marketing focused on high-intent users.
CFRA anticipates higher average revenue per subscription (ARPS) driven by increased product pricing, a more favorable mix of higher-priced subscription packages, expanded offerings, and growing adoption of Business Solutions features by subscribers.
The firm forecasts modest compression in operating profit margins for 2025 and 2026, attributing this to investments in artificial intelligence, product innovations, and spending to grow and integrate Base44. These pressures will be partially offset by operational efficiency and cost management measures. Wix currently maintains a healthy gross profit margin of 68.46% and a strong free cash flow yield of 11%.
CFRA maintained its 2025 non-GAAP earnings per share estimate of $7.43 but reduced its 2026 forecast to $7.82 from $8.75, reflecting lower margin assumptions due to higher anticipated investment spending. InvestingPro identifies multiple factors affecting Wix’s valuation, including its RSI suggesting oversold territory and recent price declines of 23% in the past week and 55% year-to-date.
In other recent news, Wix.com has experienced several changes in analyst evaluations following its third-quarter earnings report. Despite exceeding analyst expectations for bookings and revenue by 1%, the company’s profit fell short by 7% due to increased spending on compute resources and marketing for its Base44 offering. Cantor Fitzgerald lowered its price target for Wix.com to $135, maintaining an Overweight rating, while Needham reduced its target to $140, citing increased investments in Base44 as a factor. RBC Capital also adjusted its price target to $190 from $210, highlighting margin pressure from the company’s vibe coding initiatives, although they noted that bookings exceeded expectations and revised fourth-quarter guidance upward.
Additionally, Benchmark reduced its price target to $185, citing increased marketing and AI computing costs impacting the company’s near-term leverage outlook. UBS lowered its price target to $170, maintaining a Buy rating, and pointed to adjusted free cash flow estimates for 2026 and 2027 being reduced by 11% and 9%, respectively. Despite these adjustments, UBS anticipates free cash flow growth to reaccelerate to high-teens percentages in 2027 and beyond. These developments reflect a mix of optimism and caution among analysts regarding Wix.com’s future prospects.
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