Wix.com Ltd. (NASDAQ: WIX)

Sector: Technology Industry: Software - Infrastructure CIK: 0001576789
Market Cap 5.35 Bn
P/B -19.18
P/E 38.49
P/S 2.77
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,...

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Price action

Investment thesis

Bull case

  • 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.

Bear case

  • 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 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.21 2.69
EV to Cash from Ops. EV/CFO 10.11 28.91
EV to Debt EV to Debt 3.59 19.83
EV to EBIT EV/EBIT 49.24 -9.95
EV to EBITDA EV/EBITDA 40.12 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 10.27 26.09
EV to Market Cap EV to Market Cap 1.06 0.36
EV to Revenue EV/Rev 2.92 -9.34
Price to Book Value [P/B] P/B -19.18 3.88
Price to Earnings [P/E] P/E 38.49 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Int. cover (Qtr) 90.66 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 66.74 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 104.55 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 146.31 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 44.26 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) 73.64 20.13
EBT Growth (1y) % EBT 1y % (Qtr) 5.01 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 48.21 67.50
FCF Growth (1y) % FCF 1y % (Qtr) 28.70 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 14.15 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.75 0.67
Cash Payout Ratio Cash Payout Ratio 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.83 1.22
Current Ratio Curr Ratio (Qtr) 1.62 2.59
Debt to Equity Ratio Debt/Equity (Qtr) -5.64 -0.96
Interest Cover Ratio Int Coverage (Qtr) 90.66 -14.20
Times Interest Earned Times Interest Earned (Qtr) 90.66 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 7.50 -548.16
EBIT Margin % EBIT Margin % (Qtr) 5.94 -199.84
EBT Margin % EBT Margin % (Qtr) 5.87 -607.20
Gross Margin % Gross Margin % (Qtr) 68.40 51.88
Net Profit Margin % Net Margin % (Qtr) 7.20 -610.00