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On Thursday, Citi analysts, led by Ygal Arounian, increased the price target for Wix.com (NASDAQ:WIX) shares, raising it to $280 from the previous target of $275. The firm sustained a Buy rating on the stock. The adjustment comes after Wix.com reported robust fourth-quarter results, with both bookings and free cash flow surpassing expectations. According to InvestingPro data, the company has demonstrated strong performance with a 73% return over the past year and currently appears to be trading above its Fair Value. The company’s market capitalization stands at $12.2 billion, reflecting investor confidence in its growth trajectory.
The company’s guidance for the future also suggests sustained top-line growth and significant margin expansion throughout 2025. Despite Wix.com shares falling by approximately 5% today, analysts at Citi believe this does not reflect the company’s fundamental strength. They attribute the cautious investor response to an anticipated slowdown in bookings growth in the first quarter of 2025, which they think is due to the company cycling through the previous year’s pricing benefits. InvestingPro data reveals the company’s solid fundamentals, with a 67.9% gross profit margin and revenue growth of 12.7% in the last twelve months. For deeper insights into Wix.com’s financial health and growth prospects, InvestingPro offers comprehensive analysis with 15+ additional ProTips and detailed metrics.
Citi’s analysts pointed out that Wix.com’s management had previously forecasted a similar pattern of acceleration in the latter half of the year and had surpassed its targets. They find it promising that Wix.com’s guidance for a 14% growth in bookings on a constant currency basis for the fiscal year 2025 does not rely on the impact of pricing changes or new products. Instead, it is expected that the contributions from 24 existing offerings will increase in 2025.
Looking ahead to fiscal year 2026, Citi analysts are optimistic about Wix.com’s prospects, citing potential for more pricing power and the impact of new products launched in 2025 becoming more significant contributors to growth. They anticipate that these factors, combined with continued cost management and margin outperformance, will position Wix.com for sustained top-line momentum over multiple years. The company maintains a moderate debt level and operates with strong cash flows, generating $428.2 million in levered free cash flow over the last twelve months. For a complete analysis of Wix.com’s growth potential and financial outlook, access the detailed Pro Research Report available exclusively on InvestingPro, which provides comprehensive insights across 1,400+ top US stocks.
In other recent news, Wix.com reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $1.93, compared to the forecasted $1.59. However, the company’s revenue for the quarter was $460.5 million, slightly below the forecast of $461.87 million. Despite this revenue miss, Wix achieved its first year of positive GAAP operating income. Analysts at Raymond (NSE:RYMD) James maintained a Strong Buy rating for Wix, with a $300 price target, citing the company’s quality bookings and the momentum of Wix Studio as key drivers. Morgan Stanley (NYSE:MS) also increased its price target for Wix to $279, highlighting the company’s strong fourth-quarter performance and ongoing product innovation. JMP analysts raised their price target to $250, emphasizing the potential upside from Wix’s new product initiatives, particularly in AI. Oppenheimer retained its Outperform rating and $250 target, noting that Wix’s bookings, revenue, and free cash flow were in line with consensus estimates, supported by strong partnerships and AI advancements. These developments underscore a period of strategic growth and innovation for Wix.com.
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