2023-05-04 08:53:46 ET
Wix.com ( NASDAQ: WIX ) shares rose more than 2.5% in pre-market trading on Thursday as Raymond James upgraded the web development company a day after shares fell more than 10% on no company specific news.
Analyst Aaron Kessler raised his rating to outperform from market perform and put a per-share price target of $96 on the stock, noting he expects "continued steady bookings and revenue growth" this year as well as strong margin improvement this year and next.
Kessler added that Wix.com ( WIX ) has become more focused on improving free cash flow and is likely to keep working to cut expenses, while artificial intelligence tools should help the company, by creating faster development and lowering operating expenses.
"We view AI as a positive for the current platforms in the web presence category as it will help customers design website faster and provide more robust tools," Kessler wrote in an investor note. "We don’t believe AI is disruptive to current web presence platforms at this time and have a hard time imagining a scenario where they become disintermediated."
Kessler explained Wix ( WIX ) is using large language models across its care self-service channels like Chatbot and Help Center, which is expected to increase efficiencies.
Shares of competitor GoDaddy ( GDDY ) also rose on back of the upgrade, gaining slightly more than 2% .
Update: Citi analyst Ygal Arounian speculated that the Wednesday weakness seen in Wix.com ( WIX ), Squarespace ( SQSP ) and GoDaddy ( GDDY ) may have stemmed from a research firm placing the group into a bucket of companies "likely to be disrupted by AI."
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 .
More on Wix.com
- Israel pauses judicial reforms: What it means for the tech sector
- Wix.com rises, GoDaddy slips as Morgan Stanley changes ratings on pair
- Godaddy rises as Baird starts with outperform rating
For further details see:
Wix.com rebounds as Raymond James upgrades after 10% sell-off