Wix.com (WIX) Laps the Stock Market: Here's Why

Wix.com (WIX) ended the recent trading session at $84.25, demonstrating a +2.81% change from the preceding day's closing price. This move outpaced the S&P 500's daily gain of 0.44%. Meanwhile, the Dow gained 0.36%, and the Nasdaq, a tech-heavy index, added 0.54%.

Shares of the cloud-based web development company have depreciated by 12.72% over the course of the past month, underperforming the Computer and Technology sector's loss of 2.47%, and the S&P 500's loss of 3.31%.

Analysts and investors alike will be keeping a close eye on the performance of Wix.com in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.27, indicating a 18.06% decline compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $543.79 million, reflecting a 14.81% rise from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $6.21 per share and a revenue of $2.29 billion, signifying shifts of -15.16% and +14.8%, respectively, from the last year.

Any recent changes to analyst estimates for Wix.com should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 3.26% higher. As of now, Wix.com holds a Zacks Rank of #3 (Hold).

With respect to valuation, Wix.com is currently being traded at a Forward P/E ratio of 13.21. This valuation marks a premium compared to its industry average Forward P/E of 12.98.

Also, we should mention that WIX has a PEG ratio of 0.63. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Computers - IT Services industry was having an average PEG ratio of 1.13.

The Computers - IT Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 76, placing it within the top 32% of over 250 industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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