WIX - Wix.com rises GoDaddy slips as Morgan Stanley changes ratings on pair

2023-03-21 09:29:42 ET

Wix.com ( NASDAQ: WIX ) stock rose in early trading on Tuesday while GoDaddy ( NYSE: GDDY ) fell as Piper Sandler changed its ratings on the web development companies, as the firm is now more geared towards growth than value.

Analyst Clarke Jefferies raised his rating on Wix.com ( WIX ) to overweight from neutral and boosted his per-share price target to $120 from $99, noting that growth estimates have likely "bottomed," even if net net annual recurring revenue comes in below 50% of 2019 levels. Additionally, the company should see a significant portion of the $215M in annualized cost savings help boost Self Creator.

"Even with [less than] 15% growth in [Self Creator], that improvement in [operating expenses] has us confident in $425M+ of [free cash flow in calendar year 2025,]" Jefferies wrote in an investor note.

For GoDaddy ( GDDY ), Jefferies lowered his rating to neutral from overweight and cut the per-share price target to $88 from $100, noting the likelihood it is unable to produce $8 or more in free cash flow per share by 2024.

"We believe only a significant bookings or profitability inflection in the coming quarters could prevent risk for further top-line deceleration, potentially below MSD," Jefferies wrote in the note.

Late last month, Piper Sandler upgraded Wix.com ( WIX ) after it reported strong fourth-quarter results, citing higher subscription additions .

Analysts are largely bullish on Wix.com ( WIX ). It has a HOLD rating from Seeking Alpha authors , while Wall Street analysts rate it a BUY . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates WIX a STRONG BUY .

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