William Blair analyst Arjun Bhatia has maintained their bullish stance on WIX stock, giving a Buy rating today.
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Arjun Bhatia has given his Buy rating due to a combination of factors including Wix’s strategic acquisition of Base44, which enhances its AI capabilities and broadens its functionality beyond traditional website design. The acquisition aligns with Wix’s ongoing expansion into AI-driven solutions, such as the recently launched Wixel platform, which extends design capabilities to various media formats. The integration of Base44, a profitable company with a no-code application builder, is expected to complement Wix’s existing offerings without significantly impacting its profitability model.
Despite challenging macroeconomic conditions, Wix has demonstrated progress with key initiatives, particularly in AI and Studio, which is promising for future growth. The stock is currently trading at a valuation that Bhatia considers undervalued relative to its growth potential, as indicated by its Rule-of-40-plus profile. This suggests a moderate upside to the free cash flow multiple and potential for upward revisions in estimates, assuming stable macroeconomic conditions. However, Bhatia notes that risks such as competition, small-business exposure, and changes in SEO could impact this outlook.
In another report released today, Cantor Fitzgerald also reiterated a Buy rating on the stock with a $200.00 price target.