On Wednesday, Morgan Stanley (NYSE:MS) reiterated its Equalweight rating on Wix.com Ltd (NASDAQ:WIX) with a steady price target of $187.00. Ahead of the company's conference call, the firm underscored five key takeaways, noting a strong third quarter performance with upside to both top-line revenue and profitability. Additionally, the company's raised guidance for the fourth quarter revenue, billings, and free cash flow (FCF) indicate a positive momentum heading into the fiscal year 2025.
The analyst pointed out that Wix.com's implied billings exit rate for the fiscal year 2024 is anticipated to reach 18% at the high end, which suggests potential for a higher revenue growth in fiscal year 2025 than the current market expectation of 14%. This projection is based on the company's recent performance and forward-looking statements.
Wix.com, known for its web development services, has shown a notable improvement in its financial metrics, which is reflected in the raised forecasts for the upcoming quarter. The company's ability to exceed expectations in the third quarter has set a solid foundation for its future financial health.
The positive outlook on Wix.com's billings and revenue growth is significant as it represents the company's ability to generate sales and maintain a healthy cash flow. This is an important indicator of the company's operational efficiency and overall financial stability.
In conclusion, Morgan Stanley's reaffirmation of the Equalweight rating and price target for Wix.com is rooted in the company's recent performance and optimistic projections for its financial trajectory. The firm's analysis suggests that Wix.com is on a path to potentially outperform market expectations in the coming fiscal year.
In other recent news, Wix.com Ltd. has reported a strong third quarter with results surpassing analyst expectations. The company recorded an adjusted earnings per share of $1.50, an improvement over the anticipated $1.44. Revenue also saw a 13% year-over-year increase, reaching $444.7 million, slightly surpassing the consensus of $443.97 million.
This performance was largely driven by a 16% YoY surge in bookings growth, which amounted to $449.8 million, attributable to the company's Studio product, AI innovations, and robust commerce activity.
Wix.com's Co-founder and CEO, Avishai Abrahami, indicated that their key growth initiatives are making significant contributions to growth, with 75% of bookings from new partners coming from Studio accounts. Looking ahead, the company has increased its full-year 2024 revenue guidance to a range of $1.757-$1.764 billion, up from the earlier forecast of $1.747-$1.761 billion. Wix.com anticipates ending 2024 with an 18% YoY bookings growth at the high end of its outlook.
CFO Lior Shemesh expressed confidence in the company's position and future growth potential, highlighting their commitment to progress. These are recent developments that reflect the company's positive performance and forward-looking strategy.
InvestingPro Insights
Wix.com's recent performance aligns with several key metrics and insights from InvestingPro. The company's revenue growth of 12.85% over the last twelve months as of Q2 2024 supports Morgan Stanley's observation of strong top-line performance. This growth trajectory is further reinforced by an InvestingPro Tip indicating that net income is expected to grow this year.
The company's financial health is also reflected in its profitability. An InvestingPro Tip notes that Wix has been profitable over the last twelve months, with a gross profit margin of 67.68% for the same period. This profitability aligns with the analyst's mention of upside in both revenue and profitability.
Investors should note that Wix is trading near its 52-week high, with a year-to-date price total return of 49.53% as of the latest data. This performance underscores the market's positive sentiment towards the company, which is consistent with the raised guidance and positive momentum highlighted in the article.
For those seeking a more comprehensive analysis, InvestingPro offers additional tips and insights, with 12 more tips available for Wix.com on the platform.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.