If You Invested $1000 in Wix.com a Decade Ago, This is How Much It'd Be Worth Now
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Wix.com (WIX) ten years ago? It may not have been easy to hold on to WIX for all that time, but if you did, how much would your investment be worth today?
Wix.com's Business In-Depth
With that in mind, let's take a look at Wix.com's main business drivers.
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 customized websites and application platforms.
In 2022, the company reported revenues of $1.39 billion. Growth in the number of 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 templates and drag-and-drop editor tool to facilitate Website editing to make web stores look professional without any design experience.
Wix ADI allows users to design websites customized to meet their specific needs. Corvid by Wix is designed to aid developers manage their workflow in a streamlined manner.
Ascend by Wix suite comprises of advanced features which allow users to seamlessly connect with customers, automate work processes, and aids in expanding business. Moreover, with Wix Logo Maker users can generate a logo by utilizing artificial intelligence.
Apart from the company’s own payment solution Wix Stores, payment wallets like Apple Pay and Google Play is also available to the merchants, who they offer to customers for completing transaction done on the Wix App.
Additionally, Wix Payments platform allows users to accept payments from customers via Wix Website.
Registered users as of Sep 30, 2023, were 258 million.
For increased transparency, beginning the fourth quarter of 2019, Wix reported revenues, collections and cost of revenues under two segments: Creative Subscriptions and Business Solutions. Creative Subscriptions and Business Solutions contributed 73.8% and 26.2%, respectively, to total third-quarter 2023 revenues of $390 million.
The company also started providing Annualized Recurring Revenue (ARR) as the primary KPI for growth of its Creative Subscriptions segment. As of Sep 30, 2023, Creative Subscriptions ARR was $1.18 billion.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Wix.com ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in December 2013 would be worth $5,156.10, or a 415.61% gain, as of December 4, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 154.44% and the price of gold increased 60.06% over the same time frame in comparison.
Analysts are forecasting more upside for WIX too.
Wix’s performance is benefiting from solid momentum in Creative Subscriptions’ and Business Solutions’ segments. The company plans to tap the growing demand for Artificial Intelligence (AI) by launching new products like Conversational AI Chat for businesses and AI Meta Tags Creator. Increasing partner revenues and B2B partnerships bodes well in the long run. The conversion of new users to paid subscriptions, strong customer retention and increasing average revenue per subscription augur well. Going ahead, the company expects 2023 revenues and free cash flow margin to rise owing to business momentum. However, volatile macroeconomic environment and unfavorable foreign currency fluctuations could weigh down on the company’s performance. Stiff competition and rising accumulated deficit are major headwinds.
Over the past four weeks, shares have rallied 20.58%, and there have been 6 higher earnings estimate revisions in the past two months for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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