Wix.com (WIX) Falls More Steeply Than Broader Market: What Investors Need to Know

Core Viewpoint - Wix.com (WIX) has experienced a significant decline in stock price, underperforming compared to major indices, and is facing a challenging earnings outlook with a predicted decline in EPS for the upcoming quarter [1][2][3]. Company Performance - Wix.com ended the recent trading session at $86.83, reflecting a -3.49% change from the previous day's closing price [1]. - Over the past month, shares of Wix.com have lost 13.4%, while the Computer and Technology sector gained 1.51% and the S&P 500 gained 0.89% [2]. - The upcoming financial results are expected to show an EPS of $1.36, indicating a 29.53% decline compared to the same quarter last year, with revenue projected at $528.03 million, up 14.68% from the prior-year quarter [3]. Annual Estimates - For the annual period, the Zacks Consensus Estimates anticipate earnings of $6.76 per share and revenue of $2 billion, reflecting shifts of +5.79% and 0%, respectively, from the last year [4]. - Recent changes to analyst estimates for Wix.com indicate a dynamic business outlook, with positive revisions suggesting optimism [4]. Valuation Metrics - Wix.com is currently trading with a Forward P/E ratio of 13.81, which is lower than the industry average of 17.04, suggesting it is trading at a discount [7]. - The company has a PEG ratio of 0.74, compared to the industry average PEG ratio of 1.35, indicating a favorable valuation relative to expected earnings growth [8]. Industry Context - The Computers - IT Services industry, which includes Wix.com, holds a Zacks Industry Rank of 88, placing it in the top 36% of over 250 industries [8]. - The Zacks Rank system, which evaluates stocks based on estimate changes, currently ranks Wix.com at 4 (Sell), indicating a less favorable outlook compared to higher-ranked stocks [6].