3 Reasons Wix Could Rally 50% Into the Summer
MarketBeat.com | May 28, 2025 07:59AM ET
Wix (NASDAQ:WIX) started the week’s trading just over the $150 mark, though it has still been down 16% since its earnings report last Wednesday. The stock had been rallying into results but took a hit after missing on earnings, even as revenue came in above expectations. Guidance for the coming quarter was weaker than hoped, rattling investors and prompting a short-term sell-off.
Still, there are compelling reasons to believe the pullback is already overdone. With a solid revenue beat, strong forward bookings, continued product innovation, and aggressive buyback activity, the tech giant looks well-positioned to bounce back into the summer months.
1. Analysts Are Holding Strong or Turning More Bullish
Despite the earnings miss, a wave of analyst support should help to stabilize sentiment. Multiple teams, such as those at RBC Capital Markets and Cantor Fitzgerald, reiterated their Buy or Outperform ratings, and several refreshed price targets imply a major upside.
JMP Securities was among the most bullish in its outlook, setting a target of $250, which implies an upside target of some 65% from current levels. Each firm acknowledged the softer Q2 guidance but focused on the long-term drivers instead. Morgan Stanley pointed to first-quarter revenue growth of 13%, which beat guidance by 60 basis points.
They also highlighted momentum in the Partners segment, which grew 24% year over year, and the accelerating growth in Self Creators, now tracking near 7.5%.
RBC noted that bookings and revenue came in modestly ahead of expectations, while full-year guidance on revenue, bookings, and free cash flow remains unchanged. That suggests the weak Q2 guidance is more about conservatism than deterioration.
2. The Pullback Has Created an Attractive Setup
Sometimes, opportunity looks like a dip. With shares down 16% in just a few days, Wix now offers investors a chance to get in at a discount to recent highs, with some solid business momentum already in place. The company reiterated its full-year 2025 guidance, which calls for bookings growth between 11% and 13%, and CFO Lior Shemesh confirmed that top-of-funnel demand remains strong.
Shemesh noted that first-quarter new user cohort bookings were 12% higher than the same period last year, attributing the acceleration to an increase in users and stronger product fundamentals. When companies are growing cohorts, beating on bookings, and still pulling back on price, it often sets the stage for sharp recoveries, particularly when technical support levels hold.
3. A Bigger Buyback Signals Confidence
Perhaps the strongest signal from management came not in the numbers but in what they plan to do with cash. Wix announced an expansion of its share buyback program, a move that typically indicates one thing: management believes the stock is undervalued.
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Buybacks are not undertaken lightly. They are a direct reflection of how confident executives are in their outlook. With macro uncertainty lingering, Wix’s decision to increase capital returns to shareholders speaks volumes about where they think the business is headed.
Bank of America’s Michael McGovern referenced this when he refreshed his Buy rating on Wix with a $230 price target. He noted the company beat expectations in the first quarter, driven by higher-margin bookings. While second-quarter guidance came in slightly soft due to uncertainty among small and medium-sized businesses, McGovern added that the macro softness was largely expected.
Why Wix Still Has Room to Run
Despite the earnings wobble, Wix is still executing at a high level. Revenue is growing, bookings are accelerating, and user engagement is improving. Analysts remain supportive, price targets are stacked well above current levels, and management is putting real capital behind its belief in the company’s future.
With summer seasonality approaching and investor appetite returning for high-quality tech names, the recent pullback could represent a rare opportunity. If guidance stabilizes and macro pressures ease, Wix may well be on the path to reclaiming its previous highs and potentially reaching the $230 to $250 range being targeted by the analysts.
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