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On Thursday, Piper Sandler analyst Clarke Jeffries revised the price target for Wix.com stock (NASDAQ:WIX) to $225 from the previous $262, while maintaining an Overweight rating on the shares. According to InvestingPro data, the stock currently trades at $152.34, suggesting significant upside potential despite a recent 16.7% decline over the past week. InvestingPro analysis indicates the stock is currently undervalued relative to its Fair Value. Jeffries noted a deceleration in the growth of the Partners segment as a cause for concern in the second half of the year. The Partners business, which has been a key driver of accretive growth for Wix.com, showed a five-point slowdown quarter-over-quarter.
The analyst pointed out challenges faced by investors, particularly with the self-creator segment, which has continued to grow at a single-digit rate without reaching a double-digit exit rate in 2024. This quarter’s results have intensified investor unease due to the slower growth in the Partners segment, which was previously a strong element in the bullish case for Wix.com’s re-rating based on accelerating growth.
Moreover, Gross Payment Volume (GPV) fluctuations are seen as a normal occurrence, yet the Creative Subscriptions Annual Recurring Revenue (ARR) posted its weakest result since the first quarter of 2022, causing some concern. Despite these issues, Jeffries highlighted that Wix.com’s shares have dropped to approximately 15 times next twelve months (NTM) free cash flow (FCF) following the recent earnings report. InvestingPro data reveals the company maintains strong fundamentals with a 67.9% gross profit margin and healthy revenue growth of 12.7% over the last twelve months. For deeper insights into Wix.com’s financial health and 14+ additional ProTips, subscribers can access the comprehensive Pro Research Report available on InvestingPro.
The report also mentioned a 30% free cash flow margin result in the first quarter, suggesting that the company’s 2025 FCF projections are still within reach, even if top-line growth appears to be facing challenges. Jeffries believes that there is considerable free cash flow support for Wix.com’s narrative moving forward, despite lowering the price target to account for the newly identified risks. The company’s financial health score on InvestingPro is rated as "GOOD," with particularly strong scores in growth (4.02/5) and cash flow (3.24/5), supporting the analyst’s positive outlook.
In other recent news, Wix.com reported first-quarter earnings that exceeded expectations, with revenue and free cash flow outperforming analyst predictions. The company maintained its fiscal year 2025 guidance, anticipating 11-13% year-over-year growth in bookings, despite macroeconomic uncertainties. Analysts have responded with mixed adjustments to their price targets: Cantor Fitzgerald reaffirmed a $200 target with an Overweight rating, while UBS lowered its target to $230 but maintained a Buy rating. JMP analysts held their $250 target and Market Outperform rating, citing confidence in Wix’s growth potential. Raymond (NSE:RYMD) James also adjusted its target to $250, down from $300, while maintaining a Strong Buy rating, emphasizing Wix’s advancements in AI technologies.
B.Riley reiterated a Buy rating with a $240 price target, highlighting strong performance in the Partner channel and self-creator segment. The company’s recent innovations, including AI-powered products like Wixel, have bolstered its offerings and are seen as key drivers for future growth. Wix’s strategic focus on product development and user acquisition continues to attract positive attention from analysts. Despite some mixed quarterly results, the company’s consistent guidance and ongoing product enhancements suggest a stable outlook.
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