Shares of Wix (WIX) fell 16.96% to close at $215.49 on August 11. The uncertainty triggered by the pandemic resulted in the company reporting disappointing Q2 financials, which came in at the lower end of its expectations. The company has also lowered its full-year revenue outlook.
Wix posted revenue of $316.41 million, an increase of 34% year-over-year. Revenue also came in above consensus estimates of $311.66 million.
Total collections in the quarter were up 29% to $342.9 million. Notably, Wix delivered a non-GAAP net loss of $15.8 million, or $0.28 a share.
Supporting the Q2 results, Wix’s CFO Lior Shemesh said that they showed stronger growth than pre-pandemic quarters. (See Wix stock charts on TipRanks)
Shemesh stated, “User growth remained elevated compared to 2019, renewals remained strong and conversion and monetization per subscription were solid – all encouraging signs of strong underlying fundamentals.”
Wix has adjusted its outlook for the remainder of the year to reflect the continued uncertainty triggered by the COVID-19 pandemic. Consequently, full-year revenue is now expected between $1.26 billion and $1.27 billion, down from the initial guidance of between $1.28 billion and $1.29 billion.
Notably, the company expects Q3 revenue to range between $311 million and $317 million, translating to 22% to 25% year-over-year growth.
Yesterday, Jefferies analyst Brent Thill reiterated a Buy rating on the stock. However, the analyst lowered his price target to $300 from $360, implying 39.22% upside potential to current levels.
Thill stated, “Wix saw new user activity slow mid-quarter as confusion reigned over re-openings vs. new restrictions caused by Delta variant…We admit not having been cautious enough in our preview that showed declining traffic, but view this as S-T damage that’s repairable. Wix’s innovation is not slowing, and user needs are vast.”
Consensus among analysts is a Strong Buy based on 12 Buys and 4 Holds. The average Wix price target of $314.50 implies 45.95% upside potential to current levels.
WIX scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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