Website development platform Wix.com Ltd. (NASDAQ: WIX) helps consumers and businesses create and develop websites in minutes and enable eCommerce transactions. Domain registration was one of Wix's earliest services enabling customers to register and renew domain names as well as purchase them through the platform. Wix offers a customer relationship manager (CRM) program called Ascend, with features including lead management tools, email marketing, and automation. Its Logo Maker feature creates logos for a one-time fee.
Wix generates advertising revenues by placing ads on free Wix-created websites. These ads can be removed if the user signs up for a premium monthly subscription plan ranging from $17 to $159. Wix offers professional services priced separately for search engine optimization (SEO) and customer web development.
Wix.com operates in the computer and technology sector, competing with Shopify Inc. (NYSE: SHOP), GoDaddy Inc. (NYSE: GDDY), and HubSpot Inc. (NYSE: HUBS).
Wix.com Is Executing Its AI Strategy
Wix has invested heavily in its AI-powered tools to help users customize their sites, and it’s starting to pay off. Its Wix Studio has released 17 AI business assistants this year, with dozens more expected to launch in 2024.
The AI assistants improve the user creation experience. Its responsive AI adapts website layouts to different screen sizes especially helpful for mobile access and responsiveness. Its AI code assistant provides real-time coding suggestions and explanations.
The Wix AI Image Creator enables users to create AI images based on descriptions and a simple guided menu with the ability to upscale resolution and adjust backgrounds. The Wix AI Text Creator is a simple menu-driven tool that generates written descriptions and slogans for your business. Future AI assistants include a social campaign builder generating social media copy and an AI site assistant for customers' websites, enabling customers to ask questions and buy products.
The Wix App Market Has Over 800 Website Apps
Wix offers its Wix App Market for customers to consider buying over 800 popular website apps to enhance their websites. Wix also offers its custom-made apps like Wix Stores and Wix Blog in addition to the third-party apps. While most of the apps have a free version, the premium versions require a higher subscription plan to access the full range of features. Apps can be upgraded once subscription levels are upgraded. Third-party developers can also create and sell apps through the marketplace.
The company expanded its partnership with Alphabet Inc. (NASDAQ: GOOGL) and Google to offer Gemini AI for Workspace to its customers. Gemini is seamlessly integrated into Google Workspace apps in a single location, enabling users to collaborate and create with ease.
WIX Stocks Forms a V Bottom
The daily candlestick chart for WIX indicates a V-bottom pattern. This pattern is comprised of a sharp sell-off from the $169.58 swing high to the $137.94 low. WIX staged a rapid rally back up to test $164.55 as it continues to rise. The $169.58 swing high is the upside resistance that can trigger a breakout if WIX breaks through and stays above it. The daily relative strength index (RSI) has stalled at the 56-band. Pullback support levels are at $155.40, $147.55, $137.94 and $130.63.
Wix.com Posts a Solid Second-Quarter 2024
For its Q2 2024, Wix posted EPS of $1.67, beating $1.35 consensus analyst estimates by 35 cents. Revenues climbed 12% YoY to $435.7 million, beating $433.79 million consensus estimates. Partners grew by 29% YoY. Wix had a record take rate of 1.68%, driven by the 21% YoY growth for transaction revenue aided by a new payment partner added to Wix Payments. Bookings grew 15% YoY to $458.4 million, driven by strong Wix Studio uptake, which benefits from AI capabilities and commerce platform expansion.
Wix Stock: Reaching Rule of 40 a Full Year Ahead of Schedule
Margin expansion continued with a free cash flow margin of 27% produced by additional operating leverage. The high end of the increased free cash flow outlook will enable the company to achieve its Rule of 40 milestone one year ahead of schedule. The Rule of 40 milestone refers to the combined growth rate and free cash flow margin adding up to at least 40%. It is a measure of strong revenue growth coupled with healthy profitability.
Wix Issues In-Line Guidance
For Q3 2024, Wix expected revenues of $440 million to $445 million versus $442.92 million consensus estimates. For the full year 2024, Wix sees revenues of $1.175 to $1.76 billion versus $1.75 billion. Full-year bookings expectations were raised to $1.802 billion to $1.822 billion, representing 13% to 14% growth, up from previous guidance of $1.796 billion to $1.826 billion or 12% to 14% growth. Bookings growth will continue to accelerate to 16% in the second half of 2024, resulting from the growth in segments like Self Creators and Partners and the continued outperformance of Wix Studio, which is benefitting from its AI products.
Wix.com analyst ratings and price targets are at MarketBeat. There are 18 analyst ratings on WIX stock, comprised of one Strong Buy, 13 Buys, and four Holds, with a 13% upside to the average consensus price target of $183.56.
