WIX Slides 22% in a Month: How Should Investors Play the Stock?

Core Viewpoint - Wix.com Ltd. has experienced a significant stock price decline of 22.3% over the past month, which is more severe than the declines seen in its industry and broader market indices [1] Price Performance - The stock has dropped 19% since the fourth-quarter 2024 results were reported on February 19, despite non-GAAP EPS of $1.93 exceeding estimates and showing year-over-year growth [3][4] - Quarterly revenues increased by 14% year-over-year to $460.5 million but fell short of the consensus estimate [3] Long-Term Growth Catalysts - Wix is focusing on generative AI as a key growth driver, with the AI Website Builder launched in 2024 leading to over one million sites created [5] - New AI-driven products like Business Launcher and AI Site-Chat are enhancing user engagement and operational efficiency [6][7] - The WIX Studio platform has over 2 million accounts, indicating strong adoption among creative professionals [8] - The company is working on expanding its product offerings to enhance design capabilities and support Sales Creators [10] - Bookings in the commerce segment increased by 15% in 2024, with AI solutions expected to drive future revenue growth [11] Challenges Ahead - Approximately 40% of Wix's revenues come from non-U.S. dollar currencies, exposing the company to foreign exchange risks [14] - Forex headwinds are projected to impact 2025 bookings significantly, with an expected $45 million adverse effect [15] - Analysts have revised earnings estimates downward following recent earnings announcements, and the stock is trading below key moving averages [17][18] Investment Strategy - Despite challenges, Wix is well-positioned for long-term growth due to higher bookings and an expanding AI product suite [20] - Investors are advised to wait for a favorable entry point, while current shareholders may consider holding due to strong fundamentals [20]