Wix.com Ltd. (WIX) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001576789

P/B -20.40

P/E 40.94

P/S 2.95

Market Cap 5.69 Bn

ROIC (Qtr) -0.51

Div Yield % 0.00

Rev 1y % (Qtr) 13.61

Total Debt (Qtr) 1.57 Bn

Debt/Equity (Qtr) -5.64

About

Wix.com Ltd., a prominent player in the web development industry, is a global cloud-based platform that enables millions of users to establish, manage, and expand their digital presence. The company, which is often recognized by its stock symbol WIX, has been in operation since 2006 and has developed a comprehensive software solution for web development and management. Wix's platform is multifaceted, offering two web creation products: Wix Editor and Wix Studio. The former is designed for users with varying levels of technological capabilities,...

Wix.com Ltd., a prominent player in the web development industry, is a global cloud-based platform that enables millions of users to establish, manage, and expand their digital presence. The company, which is often recognized by its stock symbol WIX, has been in operation since 2006 and has developed a comprehensive software solution for web development and management.

Wix's platform is multifaceted, offering two web creation products: Wix Editor and Wix Studio. The former is designed for users with varying levels of technological capabilities, while the latter is tailored for professional-level users, particularly web design agencies. These products enable users to create and manage multiple websites, with Wix Editor providing a drag-and-drop visual development environment and Wix Studio offering advanced design and layouting capabilities, multi-site workflow management, and a robust code environment.

The company's suite of AI-powered web creation tools is an industry leader, simplifying and enhancing the user experience. These tools include AI Website Builder, AI Text Creator, AI Image Creator, AI Logo Maker, and Conversational AI Chat for Business, among others. Additionally, Wix provides a full-stack, no-code/low-code development environment called Velo by Wix, allowing users to combine Wix's products and solutions with advanced developer capabilities to create content-rich websites and web applications.

Wix offers a variety of complementary products and services to further enrich its users' digital presence. These include the Wix App Market, offering free and paid web applications for business building, growth, and management; Wix Marketplace, connecting users seeking website creation and management assistance with talented web designers or agencies; and Spaces by Wix, a dedicated mobile app facilitating interaction between site owners and their customers.

Premium subscriptions include all features of Wix's creation products, full use of AI tools, Velo by Wix, and other complementary products and services. They also offer top-requested business tools such as social posts, promotional videos, and invoice management, along with the ability to connect a custom domain name and remove Wix-branded ads from the site.

Wix's competitive advantages include its user-friendly platform, extensive range of products and services, and commitment to innovation and customer satisfaction. The company maintains a strong position within the industry, boasting a large and growing user base and a reputation for delivering high-quality solutions.

The company's customers span various fields, including art, finance, entertainment, music, photography, tourism, beauty, sports, food services, property management, and publishing. With its platform available in 21 languages, Wix is a global leader in the web development and management industry.

Wix's product and service offerings extend beyond web creation, encompassing domains, Google Workspace, Wix POS, gift cards, and Branded App by Wix. The company's commerce solutions cater to the unique needs of various business segments, providing a robust and comprehensive platform for all types of business owners.

In terms of infrastructure, Wix relies on a hybrid cloud comprised of both cloud-based storage and data centers, as well as third-party hardware and infrastructure to support its operations. The company's primary data centers are located in two geographically separate locations in the United States, each capable of running independently.

Wix's selling and marketing efforts primarily focus on online and offline advertising, along with sales and account management teams dedicated to meeting the needs of its partners. The company's marketing expenditures were $142.8 million in 2023, $224.3 million in 2022, and $284.5 million in 2021.

To protect its intellectual property and know-how, Wix utilizes patent, trademark, copyright, industrial design, and trade secret laws, as well as licensing agreements and third-party nondisclosure and assignment agreements. The company has filed numerous patent applications and continues to do so to protect its inventions.

Wix is subject to various laws and regulations, including data protection and storage laws, consumer protection laws, and tax laws. The company has a dedicated team working to maintain compliance with these laws and regulations.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 898.85M provide 21.18x coverage of short-term debt 42.45M, demonstrating strong liquidity position and minimal refinancing risk.
Operating cash flow of 558.26M provides exceptional 441.66x coverage of interest expenses 1.26M, showing strong debt service capability.
Robust free cash flow of 549.16M exceeds capital expenditure of 9.10M by 60.35x, indicating strong organic growth funding capability.
Free cash flow of 549.16M provides exceptional 434.46x coverage of interest expense 1.26M, showing strong debt service ability.
Retained earnings of (810.66M) represent substantial 2.91x of equity (278.76M), indicating strong internal capital generation.

Cons

Operating cash flow of 558.26M barely covers its investment activities of (177.59M), with a coverage ratio of -3.14, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of (177.59M) provide weak support for R&D spending of 561.44M, which is -0.32x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Operating cash flow of 558.26M provides insufficient coverage of deferred revenue obligations of 839.35M, which is 0.67x, raising concerns about future service delivery capabilities.
The company's operating cash flow of 558.26M shows concerning coverage of stock compensation expenses of 241.07M, with a 2.32 ratio indicating potential earnings quality issues.
Operating cash flow of 558.26M provides minimal -21.82x coverage of tax expenses of (25.58M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	2.34	2.56
EV to Cash from Ops.	10.72	38.32
EV to Debt	3.81	-11.37
EV to EBIT	52.21	-12.79
EV to EBITDA	42.55	7.72
EV to Free Cash Flow [EV/FCF]	10.90	24.22
EV to Market Cap	1.05	0.58
EV to Revenue	3.10	-35.00
Price to Book Value [P/B]	-20.40	3.74
Price to Earnings [P/E]	40.94	-18.61

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	0.00	-0.30
Dividend Payout Ratio %	0.00	2.69
Dividend per Basic Share	0.00	0.10
FCF Dividend Payout Ratio %	0.00	1.67
Interest Coverage	90.66	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	66.74	-404.11
Cash and Equivalents Growth (1y) %	104.55	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	146.31	31.15
EBITDA Growth (1y) %	44.26	49.02
EBIT Growth (1y) %	73.64	25.85
EBT Growth (1y) %	5.01	17.82
EPS Growth (1y) %	48.21	70.69
FCF Growth (1y) %	28.70	295.45
Gross Profit Growth (1y) %	14.15	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.75	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	0.83	1.21
Current Ratio	1.62	2.57
Debt to Equity Ratio	-5.64	-0.93
Interest Cover Ratio	90.66	-13.15
Times Interest Earned	90.66	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	7.50	-544.82
EBIT Margin %	5.94	-197.78
EBT Margin %	5.87	-602.74
Gross Margin %	68.40	52.06
Net Profit Margin %	7.20	-605.52

Wix.com Ltd. (NASDAQ: WIX)