CFRA upgrades Wix.com stock rating to Buy on strong revenue growth

Investing.com - CFRA upgraded Wix.com (NASDAQ:WIX) from Hold to Buy on Tuesday, setting a price target of $159.00. The stock, currently trading at $115.43, has experienced significant pressure recently, falling nearly 10% in the past week. According to InvestingPro data, the company maintains strong fundamentals with a healthy 68% gross margin and generates substantial free cash flow.

The research firm cited expectations for a "slower but still strong" two-year revenue compound annual growth rate (CAGR) of 13% through 2026, compared to the five-year CAGR of 18% through 2024. CFRA forecasts Wix.com’s revenue to grow 14% to $2.0 billion in 2025 and 13% to $2.3 billion in 2026. This projection aligns with the company’s recent performance, as InvestingPro data shows current revenue growth of 13% and a trailing twelve-month revenue of $1.87 billion.

CFRA expects premium subscriptions to increase due to healthy conversions from Wix’s large user base, supported by product innovations and efficient marketing strategies. The firm also projects higher average revenue per premium subscription resulting from increased product pricing, more favorable subscription package mix, expanded offerings, and growing adoption of Business Solutions features.

The research firm anticipates modest non-GAAP net margin expansion in 2025 and 2026, driven by better operating leverage and cost controls. These improvements will be partially offset by investments in artificial intelligence, product innovations, and headcount increases to grow and integrate Base44.

CFRA raised its 2025 non-GAAP earnings per share estimate to $7.43 from $7.24, while maintaining its 2026 estimate at $8.75. The $159 price target implies a 2026 price-to-earnings ratio of 18.2x, significantly below Wix’s five-year mean of 51.5x. Based on InvestingPro’s comprehensive analysis, which includes over 30 financial metrics and key insights, Wix.com appears undervalued at current levels. The platform’s Fair Value calculation and additional ProTips suggest strong potential upside, with analysts setting targets as high as $255.

In other recent news, Wix.com announced an expansion of its share repurchase program, adding an additional $200 million to the authorization, potentially increasing the total to $500 million. This move follows the company’s previous repurchase of $300 million in ordinary shares since the start of 2025. In terms of analyst activity, Citizens JMP lowered its price target for Wix.com to $160 from $250, citing investments in Base44 and adjusted operating income expectations. Similarly, Cantor Fitzgerald reduced its price target to $160 from $200 due to growth concerns, despite Wix’s second-quarter results showing revenue and free cash flow exceeding prior estimates by 1% and 4%, respectively.

UBS also adjusted its price target for Wix.com, lowering it to $200 from $230, but maintained a Buy rating, attributing the reduction to margin concerns. This comes even as Wix raised its full-year booking guidance by $15 million due to strong cohort performance. Benchmark reaffirmed its Buy rating and a $230 price target, highlighting the company’s strengthening business fundamentals, including a notable acceleration in bookings and gross payment volume. These recent developments provide investors with updated insights into Wix.com’s financial strategies and market position.

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