Wix.com is the IBD Stock Of The Day amid the website builder's 77% share gain in 2024. Strong institutional support is a bullish sign for Wix stock as the online design firm pivots to artificial intelligence-based products.
Wix operates a freemium software-as-a-service (SaaS) business model. While a free, ad-supported website builder is available, the company aims to convert users to a paid plan that offers more professional-looking custom features.
On the stock market today, Wix stock fell 2.5% to 218.30.
Wix stock holds an entry point of 229.79. From a technical view, Wix has forged a three-weeks-tight chart pattern and is on track to be a four-weeks tight.
The three-weeks-tight pattern forms when a stock closes within 1.5% of the prior week's close for two straight weeks. In other words, it's two weeks of tight weekly closes after the first week — so all together it's three weeks that are tight.
Also, volume usually will be quiet during this period as the stock consolidates after breaking out of its base. This signals institutional investors are comfortable with the stock's advance.
New Stock Buyback
In July, Wix's board approved a new $200 million stock repurchase program.
Wix's cloud-based web development platform allows users to create and design websites with drag-and-drop tools, without needing to know how to code. An interactive chatbot and setup wizard guides users.
Wix offers a wide array of templates for business types, plug-ins and marketing tools for website design. Wix is based in Tel Aviv, Israel.
In the small business market, Wix's main rival has been GoDaddy.
Meanwhile, shares in Wix popped 26% after its third-quarter earnings report and outlook.
Wix's September-quarter earnings rose 36% to $1.50 a share. Revenue climbed 13% to $444.7 million.
"Wix's Q3 was strong with a strong beat and raise in terms of bookings and free cash flow," RBC Capital Markets analyst Brad Erickson said in a report. "Most favorably, the company's strong AI narrative continues to resonate and importantly, reconcile with the numbers where the price increase is going better-than-expected. The company is seeing strong sign-ups and better conversion driven by AI. It has more AI-based products on the way in 2025 for all parts of the subscription business and continues finding leverage as its customer economics improve within subscription services."
For 2025, analysts estimate earnings per share of $7.24, up 20%. Revenue is expected to rise 15% to $2.02 billion.
Wix Stock Technical Ratings
"We believe the anticipated bookings acceleration to 18% exiting 2024 and the ensuing 2025 revenue acceleration should be well within reach on the back of Q3 results with strong momentum of Wix Studio adoption and AI product rollout," UBS analyst Chris Zhang said in a report.
The company's Relative Strength Rating currently stands at 94 out of a best-possible 99, according to IBD Stock Checkup. The best stocks tend to have an RS Rating of 80 or better.
Wix stock holds an Accumulation/Distribution Rating of A. That institutional ownership rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying.
Further, shares hold an IBD Composite Rating of 94 out of 99. The best growth stocks have a Composite Rating of 90 or better. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
