Wix.com: A Value Stock with Bargain Basement Price

Wix.com, a web development platform, has become a bargain basement value stock as investors rotate out of small and mid-cap stocks. Despite its strong performance, the S&P 500 has been held up by large-cap tech stocks, leading to a surprising rotation during Q2 earnings season. Wix.com's undervaluation presents an opportunity for investors to take advantage of its discounted price.

Wix.com (NASDAQ: WIX), a leading web development platform, has emerged as a bargain basement value stock as investors rotate out of small and mid-cap stocks. Despite its strong performance, Wix.com's stock has been held back by broader market trends, particularly the dominance of large-cap tech stocks in the S&P 500. This rotation during Q2 earnings season has presented an opportunity for investors to capitalize on Wix.com's undervaluation.

Investing.com reported that UBS lowered its price target on Wix.com to $200 from $230, while maintaining a Buy rating [1]. The adjustment reflects concerns about Wix.com's margin outlook due to increased investments in artificial intelligence, marketing, and headcount planned for the second half of 2025. However, UBS remains positive on Wix.com's rapid product deployment strategy, including the recent Wixel launch and Base44 acquisition, which it views as both defensive and offensive moves in the competitive web building landscape.

Cantor Fitzgerald also reduced its price target on Wix.com to $160, maintaining an Overweight rating [2]. The adjustment followed Wix.com's second-quarter results, which showed revenue and free cash flow exceeding prior Street estimates by 1% and 4%, respectively. Despite these strong fundamentals, Cantor Fitzgerald noted that the company faces uncertainty around macroeconomic conditions and product launches.

Wix.com's undervaluation presents an opportunity for investors to take advantage of its discounted price. The company has shown resilience with an 11% year-over-year growth in bookings and a healthy gross profit margin of 68.4%. Moreover, Wix.com's recent AI Visibility Overview tool and partnership with Monotype Imaging Inc. to expand its font library reflect its ongoing efforts to innovate and enhance its platform offerings.

Despite the challenges, Wix.com's strong fundamentals and growth prospects suggest that the stock could be undervalued. Analyst targets range from $166 to $250, indicating significant upside potential from current levels. As investors continue to rotate out of small and mid-cap stocks, Wix.com's strong performance and undervaluation present a compelling opportunity for investors seeking value.

References:
[1] https://www.investing.com/news/analyst-ratings/wixcom-stock-price-target-lowered-to-200-from-230-at-ubs-on-margin-concerns-93CH-4177684
[2] https://www.investing.com/news/analyst-ratings/wixcom-stock-price-target-lowered-to-160-by-cantor-fitzgerald-on-growth-concerns-93CH-4177586