What to Expect Ahead of Wix's (WIX) Q2 Earnings Release?
Wix.com Ltd. WIX is slated to report second-quarter 2022 results on Aug 10.
For the second quarter, the company expects revenues between $342 million and $346 million, suggesting 8-10% growth from the prior-year quarter's reported figure. The guidance includes the negative impact of the cessation of operations in Ukraine ($0.6 million) and foreign exchange headwinds ($4 million). The Zacks Consensus Estimate for revenues is pegged at $343.8 million, suggesting an increase of 8.9% from the prior-year quarter’s reported level.
The Zacks Consensus Estimate for the bottom line is pegged at a loss of 39 cents per share. The company reported a loss of 28 cents per share in the year-ago quarter.
The company’s earnings beat the Zacks Consensus Estimate in three quarters out of the trailing four quarters, the average surprise being 10.3%.
In the last reported quarter, Wix reported a non-GAAP loss of 72 cents per share, wider than the Zacks Consensus Estimate of a loss of 64 cents per share. However, the figure was wider than the year-ago quarter's 56 cents per share loss. Total revenues increased 14% year over year to $342 million and beat the consensus mark of $340.1 million.
Wix.com Ltd. Price and EPS Surprise
Wix.com Ltd. price-eps-surprise | Wix.com Ltd. Quote
Let’s see how things have shaped up for the upcoming announcement.
Factors to Consider
Wix’s second-quarter performance is likely to have benefited from strong bookings’ growth and an improving user base. The company’s increasing focus on monetizing existing users is likely to have acted as a tailwind.
Wix is expanding the subscriber base with product rollouts and enhancing the existing portfolio of services amid the pandemic-triggered accelerated digitalization. In June 2022, Wix announced a partnership with HotelRunner to redevelop Wix Hotels. By integrating its platform with HotelRunner’s comprehensive tech solutions, Wix plans to provide a single reliable platform for the business owners of boutique hotels, chain hotels, vacation rentals, resorts, etc., to help them grow their business online and on premise.
Also, Wix’s increasing traction among B2B businesses is likely to have driven its subscription growth in the to-be-reported quarter. Recently, Wix collaborated with LegalZoom.com to help entrepreneurs interact on the Wix or LegalZoom platforms and create, manage and grow an online presence.
Strengthening momentum across Wix’s Business Solutions, owing to the growing adoption of G-Suite and Wix Payments, is expected to have driven growth in the segment’s top line in the to-be-reported quarter.
Synergies from recent acquisitions of Modalyst, Rise, ai and SpeedETab are likely to have contributed to the top line performance.
Exit from Russia, forex volatility and weakness in global macroeconomic conditions are likely to have dented the company’s performance. Higher product development and marketing investments amid increasing competition from other cloud-based software and payment platforms are likely to have exerted pressure on the company’s margins in the fourth quarter. Focus on small and medium-sized businesses that have been hit hard by the pandemic is an added concern.
What Our Model Says
Our proven model does not predict an earnings beat for Wix this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Wix has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider as our model shows that these have the right combination of elements to beat earnings this season.
Lumentum Holdings LITE has an Earnings ESP of +3.27% and a Zacks Rank #3 currently. Lumentum is scheduled to report earnings results on Aug 16. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lumentum to-be-reported quarter’s earnings per share and revenues is pegged at $1.35 per share and $421.8 million, respectively. Shares of Lumentum have soared 15.5% in the past year.
Intuit INTU has an Earnings ESP of +1.92% and a Zacks Rank of 2. Intuit is set to announce quarterly figures on Aug 23.
The Zacks Consensus Estimate for INTU’s to-be-reported quarter’s earnings and revenues is pegged at 99 cents per share and $2.35 billion, respectively. INTU surpassed earnings estimates in the preceding three out of four quarters, with the average surprise being 16.8%. Shares of INTU have lost 12% in the past year.
Keysight Technologies KEYS has an Earnings ESP of +1.23% and a Zacks Rank #2 currently. KEYS is slated to release quarterly numbers on Aug 17.
The Zacks Consensus Estimate for KEYS to-be-reported quarter’s earnings and revenues is pegged at $1.79 per share and $1.34 billion, respectively. Keysight surpassed earnings estimates all the preceding four quarters, with the average surprise being 8%. Shares of KEYS have lost 0.5% in the past year.
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