Wix.com (WIX): Assessing Valuation After Upgraded Revenue Outlook and Major Investor Activity

Wix.com (WIX) is drawing investor attention after raising its outlook for full-year revenue growth to a higher range. This comes alongside a substantial increase in holdings by a major institutional investor.

See our latest analysis for Wix.com.

Despite an upgraded revenue outlook and heightened institutional interest, Wix.com’s share price has had a rocky ride, falling 26% over the past month and down 37% for the year to date. However, its three-year total shareholder return stands at a robust 63%, suggesting that longer-term investors have still seen substantial gains even as recent momentum has been weak.

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With analysts upbeat on revenue growth and major investors increasing their stakes, is Wix.com now trading at an attractive discount, or is the market already factoring in every bit of its future upside?

Most Popular Narrative: 34% Undervalued

Wix.com’s current share price of $135.58 stands well below the most widely followed fair value estimate of $206.09, suggesting the market is discounting its future more than the narrative would indicate. With consensus pointing sharply higher, it’s worth taking a closer look at the financial assumptions powering this view.

Accelerating adoption of AI-powered tools and onboarding funnels is driving a significant increase in new user cohorts and higher conversion to paid subscriptions, which supports expectations for revenue growth in both the near and long term.

Read the complete narrative.

Curious what’s fueling this aggressive projection? The analysts behind this narrative are calling for a profitability trajectory and valuation multiple that most investors may not anticipate. The real surprise lies in just how ambitious their assumptions get, as well as what must happen for them to hit that fair value target. Find out what’s powering the confidence.

Result: Fair Value of $206.09 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent competition from new AI-powered platforms and rising regulatory compliance costs could threaten Wix.com's ability to sustain its projected growth.

Find out about the key risks to this Wix.com narrative.

Another View: Multiples Tell a Different Story

While the analyst consensus suggests Wix.com is significantly undervalued, a comparison based on its price-to-earnings ratio paints a more cautious picture. Trading at 45.4x earnings, Wix.com appears expensive compared to the US IT sector average of 30x, and even above its fair ratio of 42x. This raises questions about whether expectations have already been priced in or if the company can grow into this premium.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Wix.com Narrative

Feel like digging into the numbers on your own terms? You can analyze the data yourself and craft your perspective in just a few minutes, so why not Do it your way

A great starting point for your Wix.com research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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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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