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On Wednesday, JPMorgan analyst Alexei Gogolev adjusted the price target for Wix.com (NASDAQ:WIX), a leading cloud-based development platform, reducing it to $189 from the previous target of $205. The firm maintained a Neutral rating on the stock. The adjustment comes as Wix trades at $227.78, having delivered an impressive 79% return over the past year. According to InvestingPro analysis, the stock is currently trading above its calculated Fair Value, with analyst targets ranging from $166 to $300. Gogolev’s commentary highlighted Wix’s early achievement of the Rule of 40—a financial benchmark suggesting a company’s combined growth rate and profit margin should exceed 40%. Wix is now aiming to become a Rule of 45 company by 2025, which suggests even higher performance standards. The company’s current performance metrics from InvestingPro support this ambition, showing a robust gross profit margin of 67.88% and revenue growth of 12.63%. InvestingPro subscribers have access to 14 additional key insights about Wix’s financial health and growth prospects.
According to Gogolev, Wix’s target is primarily attainable through free cash flow (FCF) margin expansion. The analyst pointed out that the lower end of the company’s FCF guidance surpasses the consensus estimates for the year 2025. Despite facing approximately 2 percentage points of foreign exchange headwinds in 2025, especially against the Euro and the British Pound, the impact on Wix’s FCF is expected to be less severe due to a significant portion of the company’s expenses being in non-US currencies, resulting in only about 1 percentage point of margin dilution.
Wix is also focusing on innovation to drive growth, with plans to enhance the Self Creator experience by adding more products and capabilities. The company is further aiming to improve the overall user experience on the Wix platform through the continued introduction of AI products in agentic roles. While these new products are not factored into the guidance for 2025, Gogolev believes they could provide additional upside, along with further monetization and pricing opportunities.
Despite the lowered price target, JPMorgan’s outlook on Wix’s monetization potential and FCF targets for 2025 remains optimistic. However, the need to adjust near- and mid-term estimates to reflect greater foreign exchange headwinds has led to the 8% reduction in Wix’s price target to $189 per share. For deeper insights into Wix’s valuation and growth prospects, InvestingPro offers a comprehensive research report, part of its coverage of over 1,400 US stocks, providing detailed analysis of the company’s financial health and future potential.
In other recent news, Wix.com has been the subject of several analyst reviews and has completed a significant share buyback program. Benchmark analysts maintained their Buy rating for Wix.com with a price target of $250.00, anticipating robust operational performance and revenue near the upper end of the company’s guidance. JMP Securities also kept a positive outlook, holding a Market Outperform rating and a $240.00 price target, highlighting Wix.com’s potential growth due to the adoption of Wix Studio and AI Website Builder.
However, Wells Fargo (NYSE:WFC) initiated an Underweight rating with a $208.00 price target, expressing concerns about the pace of Creative Subscription bookings decelerating more rapidly than market consensus anticipates. In contrast, Citi raised its price target to $275 from $270, maintaining a Buy rating and expressing optimism about Wix’s fundamentals despite concerns about fiscal year 2025 bookings growth guidance.
In other recent developments, Wix.com has completed a $200 million share repurchase initiative, buying back approximately 868,026 outstanding ordinary shares. This move is part of Wix.com’s broader strategy to manage its capital structure and return value to shareholders. These recent developments provide an insight into Wix.com’s financial performance and market positioning.
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