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Investing.com - Needham lowered its price target on Wix.com (NASDAQ:WIX) to $140 from $200 on Thursday, while maintaining a Buy rating on the stock. The current share price of $101.70 sits well below even this reduced target, with the stock trading near its 52-week low after falling 44% over the past six months. According to InvestingPro data, Wix appears undervalued based on its Fair Value assessment.
The price target reduction follows Wix’s third-quarter earnings report, which prompted Needham to cut its free cash flow estimates by 15% due to increased investments in the company’s Base44 product. Despite this reduction, Wix maintains strong levered free cash flow of approximately $551 million over the last twelve months.
Wix has made significant progress on free cash flow margins in recent years but is now willing to slow this growth given the potential it sees in Base44 and vibe coding technologies.
The company raised its annual recurring revenue projections for Base44 to the high end of its previous guidance, with Needham assuming Base44 will contribute to growth in 2026.
Needham noted it’s still too early to determine if Base44 will be a long-term revenue driver for Wix, leaving potential upside to estimates if the market opportunity materializes.
In other recent news, Wix.com reported strong third-quarter results, surpassing expectations in both earnings and revenue. The company raised its full-year guidance, highlighting the strength of its core platform and the acceleration of its Base44 product. Despite these positive results, several financial institutions have adjusted their price targets for Wix.com. Scotiabank lowered its target to $175, citing costs associated with AI investments, while maintaining a Sector Outperform rating. Citizens reduced its target to $185 due to concerns about free cash flow as Wix shifts focus back to growth investments. Wells Fargo adjusted its target to $184, pointing to concerns about non-GAAP operating income and free cash flow for 2026. Raymond James set a new target of $150, highlighting margin concerns despite the company’s raised bookings. Evercore ISI also lowered its target to $160, attributing the change to increased marketing expenses and lower gross margin forecasts. These developments reflect a cautious yet optimistic outlook from analysts on Wix.com’s future performance.
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