Needham analyst Bernie McTernan has reiterated their bullish stance on WIX stock, giving a Buy rating yesterday.
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Bernie McTernan has given his Buy rating due to a combination of factors that reflect both the current performance and future potential of Wix. Despite lowering the price target to $140 following the third-quarter earnings, McTernan acknowledges the company’s strategic decision to invest heavily in Base44, which has led to a 15% reduction in free cash flow estimates. This investment is seen as a temporary stall in free cash flow margin growth, but it underscores Wix’s commitment to long-term growth and innovation.
Wix has shown significant progress in improving its free cash flow margins over the years, and the increased annual recurring revenue projections for Base44 indicate strong potential. Although it’s premature to predict Base44 as a long-term revenue driver, the high-end projections suggest a promising future. If the market opportunity materializes, it could lead to an upside in the estimates, further justifying the Buy rating. McTernan’s analysis suggests confidence in Wix’s strategic direction and potential for future growth.
McTernan covers the Consumer Cyclical sector, focusing on stocks such as DraftKings, Flutter Entertainment PLC, and Super Group (SGHC). According to TipRanks, McTernan has an average return of 4.2% and a 45.80% success rate on recommended stocks.
In another report released yesterday, Oppenheimer also maintained a Buy rating on the stock with a $160.00 price target.