Is Wix.com Now an Opportunity After a 38.6% Drop in 2025?

• Wondering if Wix.com is trading at a bargain or if the price is already reflecting all the good news? Let’s break down the story behind the share price so you can decide for yourself.
• The stock recently dipped 4.4% over the past week and is down 0.9% in the last month, while this year’s return is a hefty -38.6%. Still, over three years, Wix.com boasts a strong 45.7% gain, despite a -29.6% drop across the last twelve months.
• Much of this volatility comes as the company continues rolling out new products targeted at small businesses, and there has been a steady drumbeat of industry headlines about evolving competition and tighter budgets in tech spending. These stories have helped shape market sentiment, contributing to shifts in both optimism and caution among investors.
• On our six-point valuation checklist, Wix.com scores 4, meaning it appears undervalued in four areas. Let’s dive into the valuation itself using several approaches and stay tuned for a fresh perspective that could change how you view the stock’s worth.

Find out why Wix.com's -29.6% return over the last year is lagging behind its peers.

Approach 1: Wix.com Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by forecasting its future cash flows and then discounting those amounts back to the present. For Wix.com, analysts and projections are combined to anticipate how much cash the business will generate over time, providing a forward-looking assessment that looks past short-term market swings.

Right now, Wix.com’s Free Cash Flow stands at approximately $511 million. Projections indicate steady growth over the coming decade, with annual FCF expected to reach nearly $1.19 billion by the end of 2029. Analyst forecasts directly cover about five years, and additional years are extrapolated from current trends. All figures are presented in US dollars.

This DCF model uses these estimates to determine the company's fair value today. The calculation arrives at an intrinsic value of $247.39 per share, which implies the stock is trading at a 46.3% discount. According to this cash flow analysis, the numbers suggest that Wix.com is significantly undervalued at current prices.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Wix.com is undervalued by 46.3%. Track this in your watchlist or portfolio, or discover 872 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Wix.com.

Approach 2: Wix.com Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used metric for valuing profitable companies like Wix.com because it ties a company’s market price directly to its actual earnings. This helps investors quickly gauge how much they are paying for a dollar of profit, making it especially relevant when the company is generating consistent, positive earnings.

A "normal" or "fair" PE ratio depends on several factors. Companies with strong growth prospects or lower perceived risks often warrant higher PE ratios, while slower growth or higher-risk companies tend to trade at lower multiples. This makes context essential when assessing whether a PE ratio is high or low.

Wix.com’s current PE ratio is 44.5x. This is well above the IT industry average of 30.5x, but lower than the peer average of 76.3x. At first glance, the elevated PE may raise questions about valuation. However, it is important to consider the specific fundamentals and growth outlook of Wix.com when interpreting this number.

Simply Wall St’s "Fair Ratio" for Wix.com is 41.0x. This proprietary metric offers a tailored benchmark, factoring in Wix.com's earnings growth, profitability, business risks, industry trends, and market capitalization. Unlike simple industry or peer comparisons, the Fair Ratio reflects a more nuanced understanding of what a reasonable PE should be by taking into account the unique qualities of the business and broader market context.

Comparing Wix.com’s current PE ratio of 44.5x to the Fair Ratio of 41.0x suggests the stock is slightly overvalued based on its current earnings profile and risk-adjusted growth potential.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1402 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Wix.com Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives, a smarter and more dynamic approach to investing that connects the story behind a company with the numbers that drive its value.

A Narrative allows you to express your unique perspective on Wix.com by outlining your own forecasts for revenue, profits, and margins. You craft a “story” directly linked to your assumptions, which then instantly calculates a fair value based on them. This approach serves as a practical bridge from analysis to action, answering the question: “Does this company’s story justify its current market price?”

Available to millions of investors on Simply Wall St’s Community page, Narratives give you the ability to compare your fair value to the real-world price. They update automatically as new data and news are released, so your view adapts in real time.

For example, on Wix.com, one investor’s Narrative might set a fair value at $255.00 based on rapid AI adoption and new revenue streams, while another sees $160.00, reflecting concerns about competition and margin pressures. This provides you with instant context for your own decisions.

Do you think there's more to the story for Wix.com? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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