Is Wix.com (WIX) a Buy as Wall Street Analysts Look Optimistic?

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Wix.com (WIX), and emphasizes the importance of using these recommendations in conjunction with other analytical tools for making investment decisions [1][5][10]. Brokerage Recommendations - Wix.com has an average brokerage recommendation (ABR) of 1.43, indicating a consensus between Strong Buy and Buy, based on 23 brokerage firms [2]. - Out of the 23 recommendations, 17 are classified as Strong Buy and 2 as Buy, which represent 73.9% and 8.7% of all recommendations respectively [2]. Limitations of Brokerage Recommendations - Solely relying on brokerage recommendations may not be advisable, as studies indicate they often fail to guide investors effectively towards stocks with high price appreciation potential [5]. - Brokerage firms tend to exhibit a positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [6][10]. Comparison with Zacks Rank - The Zacks Rank, which is based on earnings estimate revisions, is presented as a more reliable indicator of near-term stock performance compared to the ABR [8][11]. - The Zacks Rank is a quantitative model that reflects timely changes in earnings estimates, while the ABR may not always be up-to-date [12]. Current Earnings Estimates for Wix.com - The Zacks Consensus Estimate for Wix.com remains unchanged at $7.55 for the current year, suggesting stable analyst views on the company's earnings prospects [13]. - Due to the unchanged consensus estimate and other factors, Wix.com holds a Zacks Rank of 3 (Hold), indicating a cautious approach despite the favorable ABR [14].