Oppenheimer analyst Ken Wong cut the firm’s rating on Wix.com Ltd. ( NASDAQ: WIX ) on Wednesday as macroeconomic headwinds hit the business.
Wong assumed coverage of the stock on Wednesday, moving the rating on the name from “Outperform” to “Perform”, noting that the updated rating aligns more closely with its peer group. He added that demand headwinds are likely to keep the stock from outperforming as his predecessor had anticipated.
“We see the newfound focus on margins as a positive pivot to offset concerns as investors await an inflection in the customer funnel,” Wong acknowledged. “ However, our conversations suggest investors remain skeptical, with narratives such as "too little, too late" and "fool me once ..." common talking points of bears.”
He added that recession fears continue to weigh on shares with a market downturn threatening to exacerbate concerns over pulled-forward demand from the pandemic.
Despite the downgrade, shares gained 2.31% in Wednesday’s trading. Shares have fallen over 80% in the past year.
Read more on JMP Securities’ recent downgrade of Squarespace .
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Wix downgraded as skepticism on long term targets increases