Wix.com (WIX, Financial) experienced a significant decline in its stock price, dropping by 16.18%, after its recent quarterly results failed to fully meet market expectations. In contrast, the broader market experienced a more modest impact, with the S&P 500 index only declining by 1.6%.
Wix.com (WIX, Financial) reported first-quarter revenue of $474 million, marking a 13% year-over-year growth. Additionally, total bookings increased by 12% to $511 million. The company's non-GAAP net income rose to just under $94 million, or $1.55 per share, from $77.3 million the previous year. Despite exceeding Wall Street's average revenue forecast of $472 million, Wix.com fell short of the expected $1.63 per share in adjusted net income. The growth was largely fueled by its advanced AI capabilities and the success of its Wix Studio platform.
The company's stock is currently priced at $152.34, with a market cap of $8.48 billion. It has a price-to-earnings (P/E) ratio of 64.83, indicating that the stock might be overvalued at present levels. According to GuruFocus, Wix.com's GF Value is calculated at $113.72, which suggests that GF Value significantly overvalues the stock. The company's free cash flow (FCF) is estimated to be between $590 million and $610 million, contributing to a strong financial outlook.
However, there are warning signs, such as a declining gross margin percentage and a return on invested capital (ROIC) that is below the weighted average cost of capital (WACC), indicating potential inefficiencies. On the positive side, Wix.com has a strong Altman Z-Score of 3.04 and a high Piotroski F-Score of 7, suggesting a robust financial position.
Looking forward, Wix.com expects its 2025 bookings to be in the range of $2.025 billion to $2.06 billion, which represents at least an 11% increase over 2024. Revenue for 2025 is projected between $1.97 billion and $2 billion, with a growth rate of 12% at the lower end. The company's future financial health appears strong, yet investors should approach cautiously, considering the current valuation metrics and market conditions.
