Yahoo Finance Why Is Wix.com (WIX) Down 7.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Wix.com (WIX). Shares have lost about 7.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Wix.com due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
WIX Q1 Earnings & Revenues Beat Estimates
Wix reported non-GAAP earnings per share (EPS) of $1.29 for first-quarter 2024, which exceeded the Zacks Consensus Estimate of $1.03.The company recorded EPS of 91 cents in the year-ago quarter.
Total revenues increased 12% year over year to $419.8 million and beat the Zacks Consensus Estimate of $417.7 million.
At the end of Mar 31, 2024, registered users were 268 million.
Quarter in Detail
Creative Subscriptions’ revenues (75.6% of total revenues) increased 9% year over year to $304.3 million. Business Solutions’ revenues (24.4%) rose 20% to $115.5 million.
Creative Subscriptions annualized recurring revenues were $1.24 billion, up 10% year over year.
Bookings of $457.3 million improved 10% year over year. Creative Subscriptions’ bookings increased 7% year over year to $334.6 million. Business Solutions’ bookings rose 21% to $122.6 million.
Region-wise, North America, Europe, Asia and others, and Latin America contributed 60%, 25%, 11% and 4% to quarterly revenues, up 11%, 13%,12% and 9% year over year, respectively.
Operating Details
Non-GAAP gross margin expanded 100 basis points to 68%, driven by improving gross margins across Creative Subscriptions and Business Solutions segments.
Wix reported non-GAAP operating income of $69.4 million compared with $48.5 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2024, Wix had cash and cash equivalents of $513.3 million. Long-term debt was $570.5 million compared with $569.7 million as of Dec 31, 2023.
Cash flow from operations amounted to $113.8 million compared with $45.9 million in the year-ago quarter.
Capital expenditures totaled $8.1 million. Free cash flow was $105.7 million.
Outlook
For second-quarter 2024, revenues are expected to be between $431 million and $435 million, suggesting 11-12% growth from the prior-year quarter's reported figure.
The company anticipates 2024 revenues to grow 11-13% and in the range of $1.73-$1.76 billion.
Non-GAAP operating expenses are suggested in the range of 50 of revenues for 2024.
Wix estimates free cash flow (excluding HQ capital expenditure) in the range of $445-$455 million, representing about 26% of revenues.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 66.05% due to these changes.
VGM Scores
Currently, Wix.com has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Wix.com has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Wix.com is part of the Zacks Computers - IT Services industry. Over the past month, DXC Technology Company. (DXC), a stock from the same industry, has gained 15.3%. The company reported its results for the quarter ended March 2024 more than a month ago.
DXC Technology reported revenues of $3.39 billion in the last reported quarter, representing a year-over-year change of -5.7%. EPS of $0.97 for the same period compares with $1.02 a year ago.
For the current quarter, DXC Technology is expected to post earnings of $0.60 per share, indicating a change of -4.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for DXC Technology. Also, the stock has a VGM Score of A.
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Wix.com Ltd. (WIX) : Free Stock Analysis Report
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