Benchmark cuts Wix.com price target to $245, maintains Buy rating

Investing.com

Published May 19, 2025 10:04AM ET

Benchmark cuts Wix.com price target to $245, maintains Buy rating

On Monday, Benchmark analyst Mark Zgutowicz revised the price target for Wix.com (NASDAQ:WIX) shares to $245 from the previous $260 while retaining a Buy rating on the stock. The adjustment comes ahead of the company's first-quarter earnings report, which is scheduled for release before market open on Wednesday, May 21, 2025. According to InvestingPro data, Wix currently trades at $179.07, with analyst targets ranging from $166 to $300, suggesting significant upside potential. The company has shown strong momentum with a 35% return over the past year.

Zgutowicz cited a cautious approach due to macroeconomic factors, leading to a slight reduction in the 2025 estimated bookings and revenue projections, now set slightly below the company's guidance midpoint. Despite this, the analyst has kept the lower end of the estimated operating expenses (non-GAAP) as a percentage of revenue, aligning with the company's expectations. InvestingPro data shows Wix maintaining strong fundamentals with a 68% gross profit margin and revenue growth of 13% in the last twelve months.

The analyst pointed out that the recent strength of the U.S. dollar, barring any additional macroeconomic headwinds, could provide an unexpected lift to Wix.com's 2025 guidance. This guidance currently accounts for approximately a 2% foreign exchange headwind to year-over-year revenue growth and a $25 million impact on free cash flow (FCF). Notably, around 40% of Wix.com's revenue is generated outside the United States.

Wix.com's free cash flow guidance for 2025, which is projected to be between 30% to 31% of revenue, includes non-GAAP operating expenses ranging from 47% to 48% of revenue. This follows the targets established during the company's 2023 Investor Day. Zgutowicz highlighted that the company's operational leverage outperformed expectations in 2024 compared to the Investor Day targets, and also reported better-than-expected revenue and gross profit. This indicates a conservatively set leverage bar for the near term.

During the upcoming earnings call, the analyst expects updates on the free cash flow margins for the company's Self Creator (SC) and Partners segments. Zgutowicz believes the Partners segment is approaching a point of accretion in the near term, which is a positive yet underrecognized fundamental catalyst. Additionally, the Partners segment's revenue is less sensitive to sales and marketing expenses compared to the Self Creator segment, suggesting potential for accretion. The analyst also anticipates further efficiencies from automation to contribute to the company's performance. InvestingPro analysis reveals the company's strong financial health with an overall score of "GREAT" and robust cash flows of $480 million in the last twelve months. Investors seeking deeper insights into Wix's financial metrics, including 12+ additional ProTips and comprehensive valuation analysis, can access the full Pro Research Report on InvestingPro.

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In other recent news, Wix.com has been the focus of several analyst updates and product announcements. Jefferies reaffirmed its Buy rating for Wix.com, maintaining a price target of $230, citing strong fundamentals and increasing interest in the company's platform. The firm expects Wix.com to continue its growth trajectory, driven by innovations such as WIX Studio and AI products. Conversely, CFRA downgraded Wix.com from Buy to Hold, reducing the price target to $159, due to a reassessment of the company's slower growth trajectory. Despite an 18% year-over-year increase in total bookings, CFRA projects revenue growth to stabilize at 13% for 2025 and 2026.

Meanwhile, Wells Fargo upgraded Wix.com to Equal Weight with a price target of $176, reflecting a more positive outlook on the company's pricing potential in 2026. The analyst noted a shift towards services, reducing macroeconomic risks, although they remain cautious about the sales funnel pressure. On the product front, Wix.com introduced an AI-powered adaptive content app, which personalizes website content in real-time based on visitor characteristics. Additionally, the company launched Astro, an AI assistant designed to streamline site and business management, enhancing user efficiency through a chat interface. These product developments underscore Wix.com's commitment to leveraging AI to enhance its digital offerings.

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