Brokers Suggest Investing in Wix.com (WIX): Read This Before Placing a Bet

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 research tools like the Zacks Rank to make informed investment decisions [1][5][10]. Brokerage Recommendations - Wix.com has an average brokerage recommendation (ABR) of 1.33, indicating a consensus between Strong Buy and Buy, based on 24 brokerage firms [2]. - Out of the 24 recommendations, 19 are classified as Strong Buy and 2 as Buy, representing 79.2% and 8.3% of total 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 potential for price appreciation [5][10]. - Brokerage analysts tend to exhibit a positive bias due to their firms' vested interests, leading to a disproportionate number of favorable ratings compared to negative ones [6][10]. Zacks Rank as an Alternative - The Zacks Rank, which categorizes stocks from Strong Buy to Strong Sell based on earnings estimate revisions, is presented as a more reliable indicator of near-term price performance compared to ABR [8][11]. - The Zacks Rank is updated more frequently, reflecting the latest earnings estimates, while ABR may not always be current [13]. Current Performance of Wix.com - The Zacks Consensus Estimate for Wix.com remains unchanged at $7.27, suggesting analysts have steady views on the company's earnings prospects [14]. - 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 [15].