Wix.com Ltd. (WIX): A Bull Case Theory

Core Thesis - Wix.com Ltd. is positioned for growth in the no-code website building market, with a strong user base and innovative offerings driving potential upside in valuation [1][5]. User Growth and Market Position - As of 2024, Wix has 282 million registered users and 6.2 million paying subscribers, benefiting from a user-friendly drag-and-drop interface and a growing professional user base [2]. - Despite a decline in user conversion rates from 2.7-2.8% in 2022 to 2.2% in 2024, overall user growth remains solid at 7% year-over-year, with strong momentum from professional partnerships growing around 30% annually [3]. Financial Performance - Average Revenue Per User (ARPU) has increased approximately 10% annually, driven by subscription price hikes and growing payments adoption, with payments contributing to 20% annual growth on $12.3 billion in Gross Merchandise Volume (GMV) [4]. - Wix's acquisition of Base44 for $80 million is expected to add $40-50 million in Annual Recurring Revenue (ARR) by 2025, contributing an additional 2-3% to organic growth [5]. Valuation and Market Potential - Wix is currently trading at a 6.5% free cash flow yield and 3.8x next twelve months (NTM) revenue, appearing undervalued compared to Squarespace's 5x takeout multiple [5]. - With potential revenue acceleration in 2026, Wix offers a projected upside of 30-50%, driven by innovation and expanding professional adoption [5].