Wix.com Stock (WIX): Should I Buy It Now?

By Amit Chowdhry ● Updated May 20, 2020
  • Wix.com Ltd (NASDAQ: WIX) recently reported a strong quarter. Should you buy Wix.com stock now? Here is some info to help you decide.

Cloud-based development platform Wix.com Ltd (NASDAQ: WIX) is known for bringing millions of businesses, organizations, and individuals online. And the Wix Editor, Wix ADI, App Market, Ascend by Wix, and Corvid by Wix enables users to build and manage websites.

At the beginning of the year, Wix.com shares were trading slightly above $127 and now it is trading at more than $193.

Recently, Wix.com Ltd (NASDAQ: WIX) reported strong first-quarter results with a major jump in April. For the quarter, revenue jumped 24% year-over-year to $216 million — which was due to a 17% increase in creative-subscriptions revenue and a 72% surge in business-solutions revenue.

“The current crisis has magnified the importance of having an online presence like never before, and we are very fortunate to offer a product that provides businesses, brands and individuals an opportunity to build and grow despite the increasing hardships that they are facing,” explained Avishai Abrahami, CEO & Co-Founder at Wix.com. “As demand for an online presence increases, we remain focused on providing best-in-class free and paid products and delivering improvements to our offering in response to our users’ needs.”

For the month of April, Wix.com saw substantial growth across total net premium subscription additions (207% increase), Wix Stores subscriptions (580% increase), Wix Restaurants subscriptions (167% increase), and Purchases of Ascend by Wix (136% increase), according to Fool.com.

“Wherever you are, whatever thing you are trying to do, whatever business you’re trying to bring online, we can suit your needs,” said Wix.com COO & President Nir Zohar in an interview with The Motley Fool.

Wix.com CFO Lior Shemesh noted that the data from April has convinced the company to double down on what it does best, using the strength of the balance sheet to invest in marketing even more. And by combining this incremental investment with the increasing demand will enable the company to make faster headway in capturing more market share.

“This immense demand uplift, coupled with the marketing investment to support it, has already driven us to a significantly higher outlook for Q2 than we originally expected. We expect collections growth of 28-30% y/y in the second quarter,” commented Shemesh.

New Partnership With Türk Telekom

Today Wix.com Ltd (NASDAQ: WIX) also announced it is expanding its global presence and partnered with telecommunication and technology service provider Türk Telekom. Through the partnership, Wix.com Ltd (NASDAQ: WIX) products are being offered as part of Türk Telekom’s bundled premium package for small and medium-sized businesses (SMBs) — which includes over 48 million subscribers, of which over 1.5 million are active SMBs.

Going forward, Turkish SMBs will be able to bring businesses and visions online using Wix. And as part of this joint effort, Türk Telekom now offers Wix subscriptions, including domain and hosting packages to current and new customers like entrepreneurs, businesses, and freelancers serving multiple sectors.

Small business owners employ over 70% of the Turkish workforce and contribute to over half of the value of the Turkish economy. And the market is comprised of a wide variety of entrepreneurs, manufacturers, hospitality owners and operators, and professional business service providers.

“We are delighted to announce this business partnership with Türk Telekom,” said Dror Shaked, EVP of Business Development at Wix.com Ltd (NASDAQ: WIX). “We have millions of users in Turkey, and the country is powered by a strong entrepreneurship and startup culture. We think that both the country and Türk Telekom’s spirit seamlessly meld with Wix’s grand vision of empowering business owners, creators and individuals and helping them take their dreams online. This joint effort represents another step towards our ongoing global expansion, one where our users are given a curated, custom-made experience, as if the brand originated in their home country.”

Should You Buy Wayfair Inc (NYSE: W) Now?

Based on the reports I have been reading, 79% of analysts are saying buy, 21% of analysts are saying hold, and 0% are saying sell.

Case From The Bulls:

As of May 15, 2020, SunTrust Robinson Humphrey, Needham, and Deutsche Bank maintained their buy rating. B of A Securities and Rosenblatt reiterated to buy. And Raymond James upgraded market perform to outperform.

Case From The Bears:

To be updated…

Disclosure: I own a small number of Wix.com shares. I wrote this article myself and I do not have any business relationship with any company whose stock I write about. I am not a financial advisor and all articles are my opinion. You should do your own due diligence and consider talking to a financial professional before investing.