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Investing.com - UBS lowered its price target on Wix.com (NASDAQ:WIX) to $200 from $230 on Thursday, while maintaining a Buy rating on the web development platform company. The stock, currently trading near its 52-week low of $126.22, has seen a challenging period with a 41.7% decline over the past six months. According to InvestingPro analysis, Wix appears undervalued despite its high P/E ratio of 49.9.
The price target reduction comes despite Wix raising its full-year booking guidance by $15 million, which UBS attributes to strong cohort performance amid an improved macroeconomic environment and top-of-funnel metrics. The company has maintained solid performance with revenue growth of 13.04% and a healthy gross profit margin of 68.4%.
UBS notes that a significant portion of the booking increase will come from Base44, which is expected to grow its annual recurring revenue from "a few million" to $40-$50 million by year-end, along with favorable foreign exchange tailwinds.
The firm expressed caution about Wix’s 2026 margin outlook due to increased investments in artificial intelligence, marketing, and headcount planned for the second half of 2025, which could limit free cash flow growth. For deeper insights into Wix’s financial health and growth prospects, InvestingPro subscribers can access 15+ additional expert tips and comprehensive valuation metrics.
Despite these concerns, UBS remains positive on Wix’s rapid product deployment strategy, including the recent Wixel launch, Base44 acquisition, and an upcoming new version of Wix Editor, which it views as both defensive and offensive moves in the competitive web building landscape. This optimism is reflected in the broader analyst consensus, with targets ranging from $166 to $250, suggesting significant upside potential from current levels.
In other recent news, Wix.com reported its second-quarter results with revenue and free cash flow surpassing prior Street estimates by 1% and 4%, respectively. The company achieved an 11% year-over-year growth in bookings, aligning with analyst expectations. Benchmark reaffirmed its Buy rating on Wix.com, citing strengthening business fundamentals and a notable increase in gross payment volume. Cantor Fitzgerald, however, lowered its price target to $160 due to growth concerns, despite maintaining an Overweight rating. In contrast, Scotiabank (TSX:BNS) raised its price target to $255, highlighting Wix.com’s shift toward monetization quality and AI-led strategies. Raymond (NSE:RYMD) James reiterated its Strong Buy rating, expecting positive momentum from new products and potential improvements in bookings outlook. Additionally, Wix.com announced upcoming price increases for its plans, set to take effect on September 26, with significant adjustments to its pricing tiers. These developments reflect a dynamic period for Wix.com as it navigates strategic changes and market expectations.
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