- Needham analyst Bernie McTernan reiterated a Buy rating and $85 price target on Wix.com Ltd WIX following a round of web developer checks.
- He spoke with 22 developers in the WIX Marketplace to shed light on the broader funnel. They did not indicate any improvement.
- Failure of the funnel to return puts his 2H'22E and '23E estimates at risk.
- In a note titled "Developer Checks Point to Continued Funnel Weakness," he provided a scenario analysis contemplating the funnel lower for longer and negatively impacting his adjusted EBITDA estimates by -9% and -18% in '22E and '23E, respectively.
- That said, the stock looks cheap to him on his '23E estimate, even in his bear case scenario.
- He thinks the subscription nature of the business would support relative outperformance in a worsening economy.
- Utilizing its freemium-based business model, Wix's broad funnel approach to user acquisition is attractive through both a value creation and marketing efficiency lens, in his view.
- He believes penetration of SMB websites is low and sees growth potential from companies being brought online and companies switching from existing domains to a more vertical-specific design-build.
- Moreover, consistent cohort behavior and further evidence of monetization abilities through a relatively inelastic consumer base raise his conviction in the sustainability of the long-term growth trajectory of the business in an already large, fragmented market.
- Price Action: WIX shares traded lower by 0.43% at $65.52 on the last check Wednesday.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.