UBS Maintains Buy Rating on Wix.com, Cuts PT to $200 from $230

UBS Maintains Buy Rating on Wix.com, Cuts PT to $200 from $230

UBS has maintained its Buy rating on Wix.com (NASDAQ: WIX) while reducing its price target to $200 from $230, according to a recent report. This adjustment follows the company's strong second-quarter (Q2) results, which showed revenue and free cash flow exceeding prior Street estimates by 1% and 4%, respectively [1].

Wix.com reported a 13% year-over-year (YoY) revenue increase to $1.87 billion, with a healthy gross margin of 68%. The company's sequential acceleration in bookings, driven by new Studio cohort incrementality, particularly in the U.S. market, contributed to this growth. Gross payment volume (GPV) accelerated by 120 basis points quarter-over-quarter (QoQ), further underscoring the company's robust performance [1].

The acquisition of Base44, completed in June, is expected to reach approximately $40-50 million in annual recurring revenue (ARR) by year-end, a substantial increase from just a few million in ARR at the time of acquisition. This acquisition, along with the company's emphasis on "vibe coding" as a major growth driver, highlights Wix's commitment to innovation and expansion [1].

In response to these results, Cantor Fitzgerald adjusted its price target for Wix.com to $160, maintaining an Overweight rating. Meanwhile, Scotiabank raised its price target to $255, citing a shift in Wix’s business model towards monetization quality and AI-led upsell strategies. Raymond James reiterated a Strong Buy rating with a $250 price target, expressing optimism about Wix’s Studio and new self-creator products. Benchmark maintained a Buy rating with a $230 price target, noting upcoming price increases for several subscription plans set to take effect in late September [1, 2].

Wix.com's recent developments, including the launch of the AI Visibility Overview tool and partnerships to expand its font library, reflect its ongoing efforts to innovate and enhance its platform offerings. These initiatives are part of Wix's broader Generative Engine Optimization initiative and aim to improve user experience and brand visibility in AI-powered search engines [1, 2].

Despite the recent price target reduction, Wix.com's strong fundamentals and growth prospects have been acknowledged by multiple analysts. The company's ability to adapt and innovate in a competitive market has been a key factor in its continued success.

References:
[1] https://www.investing.com/news/analyst-ratings/wixcom-stock-rating-reaffirmed-at-buy-by-benchmark-on-strong-bookings-93CH-4177637
[2] https://www.investing.com/news/analyst-ratings/wixcom-stock-price-target-lowered-to-160-by-cantor-fitzgerald-on-growth-concerns-93CH-4177586