Wix.com (WIX) Suffers a Larger Drop Than the General Market: Key Insights

Wix.com (WIX) ended the recent trading session at $87.14, demonstrating a -2.65% change from the preceding day's closing price. The stock's change was less than the S&P 500's daily loss of 1.67%. Elsewhere, the Dow lost 1.73%, while the tech-heavy Nasdaq lost 2.15%.

Coming into today, shares of the cloud-based web development company had gained 25.53% in the past month. In that same time, the Computer and Technology sector lost 7.41%, while the S&P 500 lost 6.15%.

Investors will be eagerly watching for the performance of Wix.com in its upcoming earnings disclosure. On that day, Wix.com is projected to report earnings of $1.32 per share, which would represent a year-over-year decline of 14.84%. Meanwhile, our latest consensus estimate is calling for revenue of $543.79 million, up 14.81% from the prior-year quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $6.27 per share and a revenue of $2.29 billion, signifying shifts of -14.34% and +14.8%, respectively, from the last year.

Investors should also note any recent changes to analyst estimates for Wixcom. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 15.53% decrease. Wix.com is currently a Zacks Rank #3 (Hold).

In the context of valuation, Wix.com is at present trading with a Forward P/E ratio of 14.28. Its industry sports an average Forward P/E of 12.78, so one might conclude that Wix.com is trading at a premium comparatively.

It is also worth noting that WIX currently has a PEG ratio of 0.69. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Computers - IT Services stocks are, on average, holding a PEG ratio of 1.1 based on yesterday's closing prices.

The Computers - IT Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 82, positioning it in the top 34% of all 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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

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