KeyBanc begins coverage on Wix.com with a Sector Weight By Investing.com rating
On Wednesday, KeyBanc started coverage on shares of Wix.com (NASDAQ:), assigned a Sector Weight rating and set a $165 price target. The company's analysis shows a base value of about 5.5 times in fiscal year 2024 estimated enterprise value for sale (EV/S).
The resumption of coverage reflects a cautious stance on the partner's revenue growth, with revenue estimates below the agreement. However, expectations for the company's margins are in line with the overall market outlook.
The KeyBanc report highlights Wix.com's robust web development platform, noting its ability to empower users to do it themselves. Commercial platform capabilities are emphasized, covering a wide range of services from high-quality web presence and booking management to e-commerce and marketing solutions, in conjunction with a comprehensive ecosystem of application integration.
The company believes that the current valuation adequately reflects Wix.com's growth potential, as well as its operating potential and free cash flow generation. This assessment suggests that the stock is reasonably priced relative to its expected performance and market conditions.
In other recent news, Wix.com has been focusing on a few notable developments. The company launched the novel mobile app builder GenAI, a tool designed to simplify the creation of fully branded mobile apps for businesses. This new tool, now available worldwide, is part of Wix's premium Branded App program. BofA Securities showed faith in this move, raising its price target for Wix.com to $183, maintaining a buy rating.
Wix.com also concluded a significant share buyback of 225 million shares, repurchasing approximately 3% of the company's outstanding shares. This move demonstrates Wix's commitment to its financial strategy and confidence in its long-term growth.
In the first quarter of 2024, Wix.com reported a 12% year-over-year increase in revenue, reaching $420 million. This strong growth led CFRA, Benchmark, and RBC Capital Markets to raise their price ratings for the company. However, Piper Sandler downgraded Wix.com from Overweight to Neutral, citing valuation concerns.
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