WIX: Elevated AI Spend Will Drive Long-Term Market Leadership Confidence

Analysts have trimmed their average price target on Wix.com by about $0.60 to roughly $167.15, citing near term margin pressure from elevated AI and Base44 related investments, even as they maintain confidence in the company’s long term growth and monetization potential.

Analyst Commentary

Street research following Wix.com's latest results reflects a more nuanced stance, with price targets reset lower but ratings largely remaining positive as investors recalibrate near term expectations around margins and free cash flow.

Bullish Takeaways

• Bullish analysts highlight that Q3 revenue and bookings exceeded expectations, with management also lifting FY25 and out year bookings guidance, reinforcing confidence in the durability of Wix's underlying demand and cohort trends.
• The rapid traction of Base44 and the hyper growth in vibe coding are seen as key growth engines that could expand Wix's addressable market and support a stronger AI monetization narrative into FY26 and beyond.
• Several firms argue that, despite the recent pullback and lower targets, the stock now offers a compelling valuation relative to medium term ROI potential from AI and Base44 investments.
• Analysts also point to resilience and improvement in the core website and Creative Subscriptions business, suggesting that Wix can sustain double digit growth even as AI products scale.

Bearish Takeaways

• Bearish analysts emphasize that elevated AI compute, Base44 related spend and higher sales and marketing are weighing on EBIT and free cash flow, delaying the margin expansion story that many investors had been underwriting.
• There is concern that Vibe coding and Base44 are pressuring margins more than initially expected, while not yet clearly proving incremental to the top line, which raises execution risk around the investment cycle.
• Some commentary notes that strength in Base44 may be masking softer trends in core Creative Subscriptions, suggesting that underlying growth might be less robust than headline bookings imply.
• Investors were surprised by the magnitude and duration of the new investment levels, prompting downward revisions to long term EBITDA and free cash flow forecasts and capping near term multiple expansion.

What's in the News

• Completed a major share repurchase tranche, buying back 1.3 million shares in Q3 2025 for $175 million and finishing a $275 million program totaling 1.946 million shares, or 3.49% of shares outstanding (company buyback update).
• Raised full year 2025 revenue guidance to a range of $1.99 billion to $2.0 billion. This implies 13% to 14% year over year growth, driven by Base44 outperformance partly offset by a mix shift to longer term subscriptions (company guidance).
• Issued fourth quarter 2025 revenue guidance of $521 million to $531 million, representing 13% to 15% year over year growth (company guidance).
• Integrated Royal Mail into Wix Shipping via partner Shippo, automating UK merchants' shipping workflows and offering exclusive pricing directly within the Wix dashboard (client announcement).
• Announced a strategic collaboration with PayPal to enable AI powered product discovery and payments across leading AI agents, including Perplexity, with Wix merchants syncing catalogs and maintaining direct customer relationships (client announcement).

Valuation Changes

• Fair Value: Trimmed slightly from $167.76 to about $167.15, reflecting modestly lower long term margin assumptions.
• Discount Rate: Risen marginally from 12.56% to 12.57%, indicating a slightly higher perceived risk or required return.
• Revenue Growth: Nudged up from approximately 14.42% to 14.43%, signaling a small increase in long term top line expectations.
• Net Profit Margin: Eased from about 9.43% to 9.35%, incorporating higher near term investment and cost pressures.
• Future P/E: Edged up from 47.39x to 47.63x, suggesting a modestly higher valuation multiple on forward earnings.