WIX - Wix: Buy Rating As Strength In Bookings Continues With Robust AI Product Traction

2024-05-20 18:10:37 ET

Summary

• Wix.com Ltd. has outperformed the indices YTD, with a 21% increase in stock price since March 29. It reported its Q1 earnings, where revenue and earnings grew 12% and 43% YoY.
• The strength in Wix was driven by strong conversion and monetization rate among its new and existing customer cohorts, which led to higher ARPS and ROI from marketing spend.
• The company continues to deliver on its strategic priorities of gaining market share in its Partners Business, which grew 33% YoY, while driving AI-led product innovation with new product launches.
• For FY24, the management has raised its revenue and earnings guidance, and assessing both the “good” and the “bad,” I believe that Wix remains a “buy.”.

Introduction & investment thesis

Wix.com Ltd. (WIX) is a cloud-based web development platform for users to create websites and mobile applications without existing coding skills. The stock has outperformed the S&P 500 (SP500) and Nasdaq 100 (NDX) YTD. I last covered the stock on March 29, where I rated it a “Buy” based on my thesis that the company will continue to see greater adoption of its Wix Studio given the growing momentum in its Partners Business, while it drives innovation in its AI product portfolio to improve the user experience, leading to a higher conversion rate and monetization on the platform. Since then, the stock is up 21%, outperforming the S&P 500....

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