Wix Stock Surges as Analysts Re-evaluate Growth Prospects
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Wix's stock has seen a significant recovery, nearly doubling from its low, following positive analyst reports on its Base44 application development platform. The platform is expected to achieve 60% profit margins in the second half of the year, boosting Wix's overall financial performance. Second-quarter revenues exceeded expectations, and investment firms like Cantor Fitzgerald and Oppenheimer have raised their price targets and recommendations for the stock.
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- Wix's Base44 platform is projected to reach 60% profit margins, significantly improving its economic viability.
- Wix's second-quarter revenue increased 15% to $563 million, surpassing market expectations.
- Cantor Fitzgerald raised its price target for Wix to $90, citing strong growth prospects.
- Oppenheimer reinstated Wix on its recommended stock list with an $85 price target.
- Base44, acquired in 2025, is a key driver for Wix's expansion into application development.
- Wix anticipates $70 million in cost savings this year due to operational efficiencies.
Wix's new application development platform, Base44, initially launched with near-zero gross profit margins due to high computing costs per new user. However, the company anticipates these margins will reach approximately 60% in the second half of the year, largely driven by its self-developed language model, Base1, which significantly reduces operational expenses. This economic shift in Base44 is expected to fuel the growth of Wix, a company with nearly $2 billion in annual recurring revenue.
Wall Street analysts have taken notice, with two investment firms recently issuing positive ratings. Wix's stock, which had been down about 25% year-to-date, has nearly doubled from its lowest point. In the second quarter, Wix's overall adjusted gross profit margin was 67%, compared to 70% in the same period last year. The company's revenue for the second quarter rose 15% to approximately $563 million, exceeding market expectations of $554 million. Bookings increased 12% to about $569 million, and adjusted earnings per share reached $1.39, surpassing the expected $1.13.
Investment bank Cantor Fitzgerald raised its price target for Wix shares to $90, a roughly 17% increase from the current price, maintaining an "overweight" rating. Analyst Deepak Mathivanan predicts that third-quarter orders and revenues will exceed projections, noting a weakening impact from exchange rates and sustained growth from Base44. Cantor Fitzgerald forecasts a moderate double-digit growth for the fourth quarter and expects Wix management to present its 2027 strategic plan.
Oppenheimer & Co. has reinstated Wix on its list of recommended Israeli stocks, setting a price target of $85. The firm highlights Base44's achievement of over $100 million in annual recurring revenue and Wix's expansion from website building to application development. Based on consensus estimates for 2027, Wix shares are trading at a forward adjusted price-to-earnings multiple of less than 11, significantly lower than the software industry average.
Base44 was acquired by Wix in 2025 from its founder, Maor Shlomo, who started it as a side project with fewer than ten employees. The initial payment was $80 million in cash, with additional payments contingent on performance through 2029. Wix is projecting cost savings of approximately $70 million this year and $150 million on an annualized basis due to operational efficiencies, including those from Base44 and Base1. Free cash flow in the second quarter was about $53 million, or $61 million excluding restructuring costs.
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