Wix.com stock holds Buy rating at Benchmark ahead of earnings

Investing.com - Benchmark maintained its Buy rating and $230.00 price target on Wix.com (NASDAQ:WIX) ahead of the company’s second-quarter earnings report scheduled for Wednesday, August 6. Currently trading at $142, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $168 to $250. The company has demonstrated strong fundamentals with a 12.89% revenue growth over the last twelve months.

The web development platform provider, which maintains a solid financial health score according to InvestingPro’s comprehensive analysis, recently announced price increases set to take effect September 26, which will include a simplified consolidation of its pricing tiers. The company plans to increase prices by 21% for its Combo plan (to be renamed Light), 61% for Unlimited, and 26% for Pro and Business Basic plans (both to be consolidated under a new Core tier).

These upcoming price adjustments are less aggressive than Wix’s March 2024 increases, which ranged from 45% to 261% across various subscription tiers. The company’s VIP plan will remain unchanged at $39 per month.

Wix continues to offer discounts on two-year and three-year payment plans, with approximately 84% of all premium subscriptions on annual or multi-year contracts as of the fourth quarter of 2024.

Benchmark noted that Wix’s enterprise value to next-twelve-months adjusted EBITDA multiple has decreased by half since January, reflecting market concerns about decelerating foreign exchange-neutral revenue growth as the company laps the effects of its March 2024 price increases.

In other recent news, Wix.com Ltd. has announced a strategic partnership with Alibaba (NYSE:BABA).com to enhance global reach for small and medium-sized enterprises. This collaboration allows Wix merchants to leverage Alibaba’s wholesale platform, while Alibaba sellers can utilize Wix’s technology to create storefronts. The partnership aims to facilitate trade across over 200 countries and regions, offering significant growth opportunities for businesses. Additionally, Oppenheimer has maintained an Outperform rating on Wix, citing the strategic benefits of the Alibaba partnership.

In another development, Wix has introduced its AI Visibility Overview, a tool designed to help businesses track their brand’s presence in AI-powered search engines. This tool is part of Wix’s Generative Engine Optimization initiative and is integrated into their existing SEO suite. Furthermore, Wix has expanded its font library through a partnership with Monotype Imaging Inc., adding popular typefaces like Helvetica and Avenir to its platform. These recent developments highlight Wix’s ongoing efforts to enhance its offerings and global reach.

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