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On Wednesday, Oppenheimer reaffirmed its Outperform rating and $250.00 price target for Wix.com shares (NASDAQ:WIX), following the company’s release of its fourth-quarter earnings. The results showed that Wix.com’s bookings, revenue, and free cash flow (FCF) were in line with consensus estimates. The figures reported were $464.6 million for bookings, $460.5 million for revenue, and $133.7 million for FCF, compared to the consensus estimates of $463 million, $462 million, and $128 million, respectively. With a market capitalization of $12.02 billion and impressive 79% return over the past year, Wix has demonstrated strong momentum. InvestingPro analysis indicates the company maintains a GOOD financial health score of 2.77.
The company’s performance was attributed to various factors, including the success of Wix Studio, AI, partnerships, pricing strategies, and transactional strength, which saw a 23% increase. The partnerships segment was particularly strong, contributing to a 29% growth and aiding in a 13% rise in Average Revenue Per Subscriber (ARPS), as well as retention improvements to 106%. This growth aligns with the company’s broader trajectory, showing a 12.63% revenue increase in the last twelve months. InvestingPro subscribers can access 15+ additional insights about Wix’s growth potential and financial health.
Despite these positive indicators, Wix.com experienced a decline in premium subscribers, which dropped by 72,000. This was partly due to a price increase and the completion of business-to-business migrations from 2023. Wix also provided guidance for fiscal year 2025, anticipating mid-teens revenue growth and low-teens bookings growth, excluding foreign exchange impacts. This forecast aligns with investor expectations.
The company’s outlook for the fiscal year 2025 FCF margin is 31-32%, excluding foreign exchange effects, which surpasses the consensus margin expectation of 28.5%. While management’s track record of execution has been solid, there is anticipated debate regarding the strategy for accelerating bookings in the second half of the year, especially given the tougher comparison from the previous year and the absence of a clear catalyst such as pricing changes.
In other recent news, Wix.Com Ltd reported its fourth-quarter 2024 earnings, which exceeded analyst expectations with an earnings per share (EPS) of $1.93, surpassing the forecast of $1.59. However, the company reported a slight revenue miss, with $460.5 million in revenue compared to the forecast of $461.87 million. This quarter marked a significant milestone for Wix, as it achieved its first year of positive GAAP operating income, amounting to $100 million. Despite these achievements, the stock experienced a slight decline in pre-market trading. Looking ahead, Wix projects total bookings for 2025 to range between $2.02 billion and $2.016 billion, indicating an anticipated growth rate of 11-13%. The company also expects total revenue for 2025 to be between $1.97 billion and $2 billion, with an improved non-GAAP gross margin of 70%. Analysts from Citigroup (NYSE:C) noted the company’s strategic focus on AI initiatives and new product launches as potential drivers for future growth. Additionally, Wix’s robust performance in 2024 was highlighted by a 15% increase in total bookings, reaching $1.83 billion, and a 13% growth in revenue to $1.76 billion.
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