Piper Sandler analyst Clarke Jeffries has upgraded Wix.com (WIX) from Neutral to Overweight, raising the price target from $184 to $200. This bullish stance stems from Jeffries’ belief in Wix’s strong growth potential and its impressive transformation over the past two years.
Wix has significantly improved its free cash flow margins, expanding them by 28 points in just two years, while maintaining stable growth. Jeffries acknowledges his earlier downgrade earlier this year was based on concerns about Wix’s short-term growth outlook. However, he now believes that Wix offers a compelling value proposition from a valuation perspective, especially when compared to GoDaddy Inc (GDDY). Despite both companies trading at similar valuations, Wix demonstrates a higher growth rate and potential for margin expansion beyond 2025.
Jeffries highlighted the recent success of web builders, with public vendors in this space outperforming the market year-to-date. Profitability and capital returns have been key drivers of this performance. However, given the strong performance and the recent Squarespace deal, Jeffries feels it’s an opportune time to reassess his outlook on GoDaddy and Wix.
Both companies currently sit at ~$160, trading at ~17 times calendar 2025 free cash flow. Looking ahead to 2025, Jeffries believes that growth and margin improvement will be key differentiators for stock performance. He sees a more compelling case for Wix at current levels, given its potential for continued growth and margin expansion.
Jeffries projects Wix’s third-quarter revenue to reach $444.4 million with earnings per share (EPS) of $1.70. While customer growth in the Web Builders space has been challenged since 2021 due to economic headwinds, Wix has managed to maintain growth through increased pricing. Looking forward, Jeffries believes Wix is well-positioned to capitalize on a normalized economic environment, making it the preferred choice for investors seeking long-term growth and value.
Wix stock closed Monday at $164.58, up 2.45%.
