Yahoo Finance Why Is Wix (WIX) Stock Soaring Today
What Happened:
Shares of website design and e-commerce platform provider Wix.com (NASDAQ:WIX) jumped 21.4% in the morning session after the company reported a "beat and raise" quarter. Q1'24 revenue beat by a small margin but more convincingly on bookings. Wix also beat handily on the operating income line.
The company called out strong traction from some of its offerings, including its AI products and Wix Studio. It added, "Notably, we saw extremely strong usage of our AI Website Builder that was launched earlier in the quarter, with hundreds of thousands of sites already created using the tool over just a few months." The contribution from Wix Studio has also been impressive, with the platform recording over a million Studio accounts since it was launched, and driving "more Studio premium subscriptions than anticipated ."
Looking ahead, the company raised full-year revenue, bookings, and free cash flow guidance. Notably, management observed more visibility on bookings today than it did last time it gave guidance, which is encouraging. Overall, the results were solid.
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What is the market telling us:
Wix's shares are quite volatile and over the last year have had 13 moves greater than 5%. But moves this big are very rare even for Wix and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 10 months ago, when the stock gained 12.4% on the news that the company reported an impressive "beat and raise" quarter. Second quarter results blew past analysts' revenue and earnings per share expectations. In addition, gross margin improved significantly.
Moving ahead, revenue guidance for the next quarter and full year came in well ahead of Consensus, with the company raising the revenue outlook for the full year. Similarly, Wix raised the outlook for free cash flow (excluding HQ and cash restructuring costs) for the year to $200 - $210 million, which is expected to be driven by "accelerating revenue and incremental profitability improvements through the back half of the year." This compares to the previous free cash flow outlook of $172 - $180 million. Overall, it was a strong quarter for the company, with significant improvement in top and bottom line metrics.
Wix is up 40.3% since the beginning of the year. Investors who bought $1,000 worth of Wix's shares 5 years ago would now be looking at an investment worth $1,212.
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