What matters to most investors is how much a stock’s price changes over time. Not only can it influence your investment portfolio, but it can also help you compare investment performance across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially in tech giants and popular consumer-focused stocks.
What if you had invested in Wix.com (WIX) ten years ago? It may not have been easy to hold on to WIX all this time, but if you did, how much would your investment be worth today?
In-depth Wix.com business
With that in mind, let’s look at the main drivers of Wix.com’s business.
Headquartered in Tel Aviv, Israel and founded in 2006, Wix.com Ltd. is a cloud-based web development platform. The company’s platform offers solutions that enable businesses, organizations, professionals and individuals to develop custom websites and application platforms.
In 2022, the company reported revenue of $1.39 billion. Growth in registered users and premium subscriptions are key revenue drivers. The company’s core products and services include Wix Editor, Wix ADI, Corvid by Wix (now Velo by Wix), Wix Mobile, Web, Wix App, and Wix SEO Wi.
Wix Editor offers ready-made templates and a drag-and-drop editor tool to make it easy to edit websites so that web stores look professional without design experience.
Wix ADI allows users to design websites customized to meet their specific needs. Corvid by Wix is designed to help developers manage their workflow in a streamlined way.
The Ascend by Wix suite consists of advanced features that allow users to seamlessly connect with customers, automate workflows, and support business expansion. Also, with Wix Logo Maker, users can generate a logo by using artificial intelligence.
Apart from the company’s own Wix Stores payment solution, payment wallets such as Apple Pay and Google Play are also available to merchants, which they offer to customers to complete a transaction made within the Wix app.
In addition, the Wix Payments platform allows users to accept payments from customers through the Wix website.
Registered users as of September 30, 2023 were 258 million.
For greater transparency, starting in the fourth quarter of 2019, Wix reported revenue, collections and cost of revenue in two segments: creative subscriptions and business solutions. Creative Subscriptions and Business Solutions contributed 73.8% and 26.2%, respectively, of the 3Q2023 total revenue of $390 million.
The company also started providing Annual Recurring Revenue (ARR) as a key growth KPI for its creative subscription segment. As of September 30, 2023, ARR for creative subscriptions was $1.18 billion.
While anyone can invest, building a profitable investment portfolio requires research, patience and a little risk. If you invested in Wix.com ten years ago, you probably feel pretty good about your investment today.
A $1,000 investment made in November 2013 would be worth $5,408.83, or a 440.88% return by November 16, 2023, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 150.41% and the price of gold rose 46.17% during the same time period.
Analysts predict more upside for WIX as well.
Wix’s performance benefited from solid momentum in the Creative Subscriptions and Business Solutions segments. The company plans to capitalize on the growing demand for artificial intelligence (AI) by launching new products such as Conversational AI Chat for businesses and AI Meta Tags Creator. Increasing partner revenue and B2B partnerships bode well for the long term. The migration of new users to paid subscriptions, strong customer retention and an increase in average revenue per subscription bode well. Looking ahead, the company expects 2023 revenue and free cash flow margin to increase on business momentum. However, the volatile macroeconomic environment and adverse currency fluctuations may weigh on the company’s performance. Strong competition and a growing accumulated deficit are major headwinds.
The stock is up 13.43% over the last four weeks and there has been 1 higher fiscal 2023 earnings forecast revision compared to no lower. The consensus estimate has also risen.
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