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On Monday, Wells Fargo (NYSE:WFC) began coverage of Wix.com (NASDAQ:WIX), assigning the stock an Underweight rating and setting a price target of $208.00. The initiation comes after Wix.com’s Creative Subscription bookings saw an increase from a year-over-year growth of 5% in the fourth quarter of 2023 to 15% in the third quarter of 2024. This growth outpaced market expectations, with the consensus projecting a 14% growth for the year 2024. According to InvestingPro data, the company’s revenue growth remains solid at 12.6% over the last twelve months, with analysts expecting continued profitability this year.
Wix.com’s stock performance in 2024 was notably strong, with a surge of 105% compared to the NASDAQ 100’s rise of 32%. The stock is currently trading near its 52-week high of $247.11, with an impressive 87% return over the past year. The analysts at Wells Fargo attribute this outperformance partly to improvements in the company’s partner business and significant price increases implemented in the first quarter of 2024. InvestingPro analysis reveals that management has been actively supporting the stock through share buybacks.
However, Wells Fargo analysts express concern that as Wix.com laps these price increases, the pace of Creative Subscription bookings will decelerate more rapidly than the market consensus currently expects. This anticipated slowdown has led to Wells Fargo’s segment bookings estimate for Wix.com being 3% below the consensus as the company exits 2025.
The Underweight rating reflects Wells Fargo’s caution regarding Wix.com’s future performance, with their price target of $208.00 implying a 20 times multiple on the company’s forecasted 2026 free cash flow per share of $10.42. The analysts’ outlook suggests a more conservative stance on the stock’s valuation compared to market expectations.
In other recent news, Wix.com has experienced several notable developments. The company completed its $200 million share repurchase initiative, indicating confidence in its financial health and commitment to shareholder interests. Analysts at Citi have raised the price target on Wix.com’s stock to $275, maintaining a Buy rating. Despite concerns about the company’s FY25 bookings growth guidance, Citi remains optimistic about Wix’s fundamentals, citing potential growth driven by product initiatives.
Morgan Stanley (NYSE:MS) has revised its rating for Wix.com shares, upgrading the stock from Equalweight to Overweight and increasing the price target to $276. The analysts cite growth among Self-Creators spurred by advancements in artificial intelligence as a key factor for this optimistic outlook. On the same note, Benchmark has raised its price target on shares of Wix.com to $250, highlighting the company’s ability to consistently scale incremental flow through to free cash flow.
Piper Sandler has increased the price target for Wix.com to $249, reflecting the company’s impressive third-quarter performance, which showcased a 16% growth in bookings. This upward adjustment is based on the company’s free cash flow outcomes, which are pacing ahead of expectations. These recent developments reflect Wix.com’s positive performance and forward-looking strategy.
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