On Wednesday, KeyBanc began coverage on shares of Wix.com (NASDAQ:), assigning a Sector Weight rating and setting a price target of $165. The firm’s analysis indicates a valuation based on approximately 5.5 times the fiscal year 2024 estimated enterprise value to sales (EV/S).
The coverage resumption reflects a cautious stance on the growth of Partner revenue, with revenue estimates that are below consensus. However, the expectations for the company’s margins align with the general market view.
KeyBanc’s report highlights Wix.com’s strong web development platform, noting its ability to empower do-it-yourself users. The platform’s commerce capabilities are emphasized, which include a range of services from high-quality web presence and booking management to e-commerce and marketing solutions, alongside a broad ecosystem of app integrations.
The firm believes that the current valuation adequately reflects the growth potential of Wix.com, as well as its operational leverage and free cash flow generation. This assessment suggests that the stock is priced appropriately in relation to its anticipated performance and market position.
In other recent news, Wix.com has been the focus of several notable developments. The company has launched a novel GenAI mobile app builder, a tool designed to simplify the creation of fully branded mobile apps for businesses. This innovative tool, now available globally, is part of Wix’s premium Branded App plan. BofA Securities has shown faith in this initiative, raising its price target for Wix.com to $183, maintaining a Buy rating.
Wix.com has also concluded a significant $225 million share buyback program, repurchasing about 3% of the company’s total outstanding shares. This move demonstrates Wix’s commitment to its financial strategy and confidence in its long-term growth prospects.
In the first quarter of 2024, Wix.com reported a 12% year-over-year increase in revenue, reaching $420 million. This robust growth has led CFRA, Benchmark, and RBC Capital Markets to raise their price targets for the company. However, Piper Sandler downgraded Wix.com from Overweight to Neutral, citing valuation concerns.
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